D.
Direct proportionality means when one variable increases, the other also increases, vice versa, which is represented by an upward slope.
Answer:
39.45%
Explanation:
For the computation of capital structure weight of the common stock first we need to follow some steps which is shown below:-
Step 1
The Market value of common stock = Shares of common stock × Price of common stock
= 100,000 × $37
= $3,700,000
Step 2
The Market value of preferred stock = Shares of preferred stock × price of preferred stock
= 6000 × $30
= $180,000
Step 3
The Market value of bonds = No. of bonds × par value × Selling rate
= 5,000 × $1,000 × 110%
= $5,500,000
Step 4
Total capital = $3,700,000 + $180,000 + $5,500,000
= $9,380,000
and finally
Capital structure weight of common stock = market value of common stock ÷ total capital
= $3,700,000 ÷ $9,380,000
= 0.3945
or
= 39.45%
<span>1.4545
First we calculate the price change percentage
(2-1.9)/2 = -5%
Then the change in demand percentage:
(118-110)/110 = 7.27%
the absolute value of the elasticity coefficient is then:
|demand/price| = |.0727/-.05%| = | -1.4545| = 1.4545</span>
Answer:b. It shifts to the left
Explanation:
The supply will increases as price increases and vice versa. When the price increases and supply also increases the supply curves shifts to the right and when the price decreases and supply equally decreases supply curves shifts to the left.
In the above scenario since bracelet and necklace are exclusive products the sellers will be willing to supply more of necklace since the price has increased and less of bracelet since the price has fallen and the fall in price which leads to fall in supply of bracelet will shift bracelet supply curves to the left.
Answer:
The correct choice is C)
The most logical thing to do would be to calculate the value of the stock in 5 years time.
Explanation:
This speaks to ones understanding of dividend growth stock valuation models. These tools are used to establish a fair value for a stock by discounting the present value of its future dividends. A commonly used model is the constant growth dividend discount model.
The formula for the DDM, which assumes constant growth in dividends, is provided below.
P0 = D1/(r-g)
Where,
P0 = intrinsic value of stock
D1 = dividend payment one year from today
r = discount rate
g = growth rate
Identifying the correct answer entails establishing a timeline of the expected cash flows. We are given the following information:
t0 = $0
t1 = $0
t2 = $0
t3 = $0
t4 = $0
t5 = $0.20
t6 = $0.20 * 1.035
Given a rate of return, we could use the constant growth dividend discount model to establish the fair value of the firm at t5 (five years from today). Incidentally, to determine today's value, we'd discount it back another five years.
Based on the information above, we are able to prove that the answer is '5'.
Cheers!
