It gives you a map so that you can find where u are going
        
             
        
        
        
Answer:
$50
Explanation:
Dividend discount model (DDM) is used to calculate intrinsic value of a stock. Since the dividends are expected to grow indefinitely, the formula will be as follows;
Price (P0) = D1 / (r-g)
where D1 = Next year's dividend = 2.50
r = required rate of return = 12% or 0.12 as a decimal
g = dividend growth rate = 7%
Price (P0) = 2.50/(0.12-0.07)
P0 = 2.50 /0.05
P0 = $50
 
        
             
        
        
        
Answer: As the firm produces more of a good, the cost of producing each additional unit increases this implies that the marginal cost of producing a good increases as it makes more of that good. 
 Explanation: Marginal cost of a producer refers to the addition in total cost when one more unit of a good is produced. 
It is given by 
Refers to the following situations, 
MC increases when adding output increases TC or Total Cost
MC decreases when adding output decreases TC
MC remains constant when adding output does not change TC
The supply curve of the firm is an upward sloping curve, which shows that quantity increases as price increases. 
So, in relation to this, it means that MC will also increase as quantity increases.