Question

TRUE OR FALSE: Present Value of Growth Opportunities (PVGO) can only take on a positive value

TRUE OR FALSE: Present Value of Growth Opportunities (PVGO) can only take on a positive value

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

This given statement is a false statement because present value of growth opportunities can be used in two scenarios when there are positive net present value method and negative net present value projects as growth model and no growth models respectively.

So there is a No growth model, which calculate the value of negative NPV projects so thethe given statement is false because it says that present value of growth opportunities can only be used in positive npv projects.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Share X has Earnings Per Share of 12 and its Present Value of Growth Opportunities is...
Share X has Earnings Per Share of 12 and its Present Value of Growth Opportunities is $101.34. Given a market capitalization rate of 18.85%, and a plowback ratio of 45% calculate the Return on Equity for Share X.
True or False? If market interest rate falls to zero, then bonds can be issued at...
True or False? If market interest rate falls to zero, then bonds can be issued at zero coupon rates and their market values would be zero. FALSE Interest rate risk for bonds decreases as bond maturity decreases and as the frequency of bond interest payments rises. TRUE The fair market value of a stock rises with the expected dividend growth rate. FALSE Companies interested in maximizing shareholder value should choose capital projects with a Net Present Value of at least...
1(a). (TRUE or FALSE?) Whenever there is a ranking conflict between net present value and internal...
1(a). (TRUE or FALSE?) Whenever there is a ranking conflict between net present value and internal rate of return we generally suggest that the project with the highest net present value be chosen. 1(b). (TRUE or FALSE?) The acceptable independent projects can be ranked by using the IRR methodology, from lowest to the highest IRR. 1(c). (TRUE or FALSE?) When evaluating proposed projects with the IRR method, those projects with IRRs that are less than the required rate of return...
8. True or False. The net present value of one project cannot be compared to the...
8. True or False. The net present value of one project cannot be compared to the net present value of another project unless the investments required for each are equal. a. True B. False 9. True or False. Benefits for using payback for analyzing projects are a) it is easy to calculate and b) it ignores the time value of money. ​a. True ​b. False 10. True or False. In the heading of a Statement of Cash Flow, the time...
True or False: Based on the dividend growth model, the value of common stock decreases with...
True or False: Based on the dividend growth model, the value of common stock decreases with growth rate of dividends.
True or False? Greater compounding frequency will result in a larger present value
True or False? Greater compounding frequency will result in a larger present value
Greater compounding frequency will result in a larger present value. True or false
Greater compounding frequency will result in a larger present value. True or false
1(a). (TRUE or FALSE?) Financial managers should not rely on the net present value method as...
1(a). (TRUE or FALSE?) Financial managers should not rely on the net present value method as a primary decision method. 1(b). (TRUE or FALSE?) If the value of one currency decreases relative to the value of another currency, the currency with the falling value is said to be strengthening. 1(c). (TRUE or FALSE?) Perpetuities contain an infinite number of annuity payments.
True False Questions 1. We can calculate the present value of perpetuity by dividing the annual...
True False Questions 1. We can calculate the present value of perpetuity by dividing the annual cash inflow by the required interest rate. 2. Capital budgeting can be defined as analyzing alternative long-term investments and deciding which which assets may be acquired. 3. Limited funds being available for investment purposes is never a consideration in firm making an investment decision.. 4. In the investment decision making process, the time value of money should be given consideration..
True or False: The sum of the present value discount factors for 1...n years equals the...
True or False: The sum of the present value discount factors for 1...n years equals the present value factor for an annuity at year n.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT