Assignment
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Is PER an excellent guide to investments?
You are an analyst in the financial division of Flipper Industries (FI) which has a beta of 1.80 (you are risk-philic, so you enjoy the thrill of working somewhere so risky). The company just paid a dividend of $1 and dividends are expected to grow at 5% per year. The
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Is this true that the cost of its equity is zero, if a company does not distribute dividends?
Discuss how management’s discretion in applying accounting rules can mislead investors. Provide three examples and how the discretion can distort results?
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