Zero-balance accounts into cash management system

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Reference no: EM132046164

1. Westsyde Tool Company is expected to pay a dividend of $2.00 in the upcoming year. The risk-free rate of return is 6% and the expected return on the market portfolio is 12%. Analysts expect the price of Westsyde Tool Company shares to be $29 a year from now. The beta of Westsyde Tool Company's stock is 1.20. Using a one-period valuation model, the intrinsic value of Westsyde Tool Company stock today is _________.

$24.29

$27.39

$31.13

$34.52

2. Which one of the following is a primary benefit of implementing zero-balance accounts into a cash management system?

Increased disbursements float

Total elimination of all safety stocks

Additional cash availability

Decreased collection float

Elimination of all float

Reference no: EM132046164

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