Company returns to its investors-both shareholders-creditors

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1. A firm's present market value is $7,551,766. Their most recent annual cash flow is $620,000. Using a discount rate of 8.90%, what growth rate (of cash flow) is the market using to determine the firm's present market value? [hint: use perpetuity formula]

A) 8.21%

B) 0%

C) 2.25%

D) .69%

2. Which of the following is a measure of how much the company returns to its investors, both shareholders and creditors?

A. Return on Assets

B. Return on Equity

C. Dividends

D. Earnings per Share

Reference no: EM131983845

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