Based on the Information Provided, Calculate the Intrinsic Value in 2009

question 62

Multiple Choice

Based on the information provided, calculate the intrinsic value in 2009 of a share of INV Corp. using the Present Value of Earnings Model (infinite holding period) . For 2009 Net Income was $250,000, total debt was $50,000, and there were 206,263 shares outstanding. The required rate of return is 12% and the estimated growth rate in earnings is 5.5%.

• A) $19.43
• B) $23.98
• C) $28.52
• D) $22.73
• E) $15.50

Assess how tax policy can influence the behavior of economic agents.

Understand the concept and measurement of consumer surplus.

Recognize the impact of market changes (supply and demand) on consumer surplus.

Grasp the difference between consumer and producer surplus.

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Definitions:

Allopolyploidy

A form of polyploidy occurring when two different species mate to produce a hybrid with two different sets of chromosomes.

Flowering Plants

Plants that produce flowers as their reproductive structures, belonging to the angiosperm group, which includes a wide variety of plants from grasses to trees.

Animals

Multicellular, eukaryotic organisms in the kingdom Animalia, characterized by their ability to move, consume organic material, breathe oxygen, and reproduce sexually.

Fungi

A kingdom of organisms that includes yeasts, molds, and mushrooms, which do not carry out photosynthesis and may be decomposers or pathogens.