Answer:
a. The equilibrium price is $19 and the equilibrium quantity is 55 units.
b. The quantity will be 50 units at $20 price.
Explanation:
Given the demand function, Qa= 150 - 5P
The supply function, Qs = 17 + 2P
At the equilibrium point, the demand is equal to supply.
Demand = Supply
Qa = Qs
150 – 5P = 17 + 2P
150 – 17 = 2P+5P
133 = 7P
P = 19
Now insert P = 19 in Qa= 150 - 5P
Qa= 150 – 5(19)
Qa = 55
The equilibrium price is $19 and the equilibrium quantity is 55 units.
b. If the price is $20 then the quantity will be:
Qa= 150 - 5P
Qa= 150 – 5(20)
Qa = 50 units
The quantity will be 50 units at $20 price.
Answer:
The required return on the stock is 11.89%.
Explanation:
To calculate this, the Gordon growth model (GGM) formula is used as follows:
P = d1 / (r – g) ……………………………………… (1)
Where;
P = current share price = $77
d1 = next dividend = Recent dividend * (1 + g) = $5.37 * (1 + 0.046) = $5.61702
r = required return = ?
g = dividend constant growth forever = 4.6%, or 0.046
Substituting the values into equation 1) and solve for r, we have:
77 = 5.61702 / (r - 0.046)
77(r - 0.046) = 5.61702
77r - 3.542 = 5.61702
77r = 5.61702 + 3.542
r = 9.15902 / 77
r = 0.1189, or 11.89%
Therefore, the required return on the stock is 11.89%.
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Answer:
maximum profit = $7500
so correct option is c $7500
Explanation:
given data
mean = 500
standard deviation = 300
cost = $10
price = $25
Inventory salvaged = $5
to find out
What is its maximum profit
solution
we get here maximum profit that is express as
maximum profit = mean × ( price - cost ) ..................................1
put here value in equation 1 we get maximum profit
maximum profit = mean × ( price - cost )
maximum profit = 500 × ( $25 - $10 )
maximum profit = 500 × $15
maximum profit = $7500
so correct option is c $7500