Answer:
Price of stock- $26
Explanation:
<em>Using te dividend valuation model, the price of a stock is the present value of the future cash flows expected from the stock discounted at the required rate of return.</em>
Where a stock is expected to pay dividend growing at a specific rate, the price of the stock can be dertermined as follows:
Price = D(1+g)/(ke-g)
D -dividend payable now,
Ke-required rate of return,
g - growth rate in dividend
So we can work out the price as follows:
Price = 1.25( 1+0.04)/(0.09-0.04)
= $26
Price =$26
Answer: The price elasticity of demand for good A is 0.67, and an increase in price will result in a increase in total revenue for good A
Explanation:
The following can be deduced form the question:
P1 = $50
P2 = $70
Q1 = 500 units
Q2 = 400 units
Percentage change in quantity = [Q2 - Q1 / (Q2 + Q1) ÷ 2 ] × 100
Percentage change in price = [P2 - P1 / (P2 + P1) ÷ 2 ] × 100
% change in quantity = (400 - 500)/(400 + 500)/2 × 100
= -100/450 × 100
= -22.22%
% change on price = (70 - 50)/(70 + 50)/2 × 100
= 20/60 × 100
= 33
Price elasticity of demand = % change in quantity / % change on price
= -22.22 / 33
= -0.67
This means that a 1% change in price will lead to a 0.67% change in quantity demanded. As there was a price change, there'll be a little change in quantity demanded because demand is inelastic. Thereby, he increase in price will lead to an increase in the total revenue.
Therefore, the price elasticity of demand for good A is 0.67, and an increase in price will result in an increase in total revenue for good A
$4,050, i got that by adding up each size than subtracting the totals
Answer:
The retained earning would be debited by ($60,000)
Explanation:
According to the given data we have the following:
Number of shares outstanding=60,000
par value of $5 per share
stock dividend declared=cc
Therefore, to calculate the amount either (debited) or credited to retained earnings we would have to make the followin calculation:
Dividend value=Number of shares outstanding×par value of $5 per share×stock dividend declared
Dividend value=60,000×$5×20%
Dividend value=($60,000)
Therefore, as the dividend paid reduces retained earnings, the retained earning would be debited by ($60,000)
Answer:
d. Selling Price
Explanation:
Break even point is calculated as 
Thus, break even point in units only in two cases,
- Fixed cost is reduced that is decreased,
- Contribution per unit is increased.
Now, here the options are
a. Increase in units sales volume is of no relevance as will not impact the fixed cost or contribution per unit.
b. Increase in fixed cost will result in higher break even point, as numerator in the fraction will increase.
c. Increase in unit variable cost will ultimately decrease the contribution thus, it is of no relevance.
d. Increase in selling price will increase the contribution per unit, that is the increase in denominator value in fraction, thus, break even units will decrease.
Correct option is
d. Selling Price
