Answer: The correct answer is "e. occurs when there is a change in purchasing power as a result of a change in the price of a good.".
Explanation: The real-income effect <u>occurs when there is a change in purchasing power as a result of a change in the price of a good.</u>
The income effect corresponds to the variation in the quantity demanded of a good (or service) as a result of the modification of the purchasing power of purchase caused by a change in the price of the good in question.
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Answer: (B) Purchase order.
Explanation: The purchase order is a document used to formalize a purchase, which must have all the characteristics or details of it, such as the date of purchase, payment terms, name of the buyers, among others. These purchases can be cash (0 days) or a credit (30-90 days) to determine the agreement that the company has with its suppliers.
Answer:
Retreatism
Explanation:
Retreatism -
It is the concept or the methodology , which states that a person resigning the traditions of the society's idea of success and creating their own way of happiness and self satisfaction , is known as the method of Retreatism .
Same case is shown in the question , where Juan Carlos adapted the idea of Retreatism , in order to attain a happy life , by leaving his job and moving to the woods and enjoying the solitude .
Answer:
a) Growth rate of earnings
using the sustainable growth rate formula which is the maximum growth rate that a company can sustain without external financing:
Growth rate = ROE * (1 - retention rate)
= 15% * (1 - 40%)
= 15% * 60%
= 9%
(Retention rate = 2/5 * 100 = 40%)
b) Price of equity using dividend growth model:
P₀ = D₀ (1 + g) / (re – g)
D₀ = the current dividend (whether just paid or just about to be paid) = $3
g = the expected dividend future growth rate = from A above (9%)
re = the cost of equity = 12%
= 3 (1 + 0.09) / (0.12 - 0.09)
= $109
c) Price of equity
P₀ = D₀ (1 + g) / (re – g)
= 4 (1 + 0.09) / (0.12 - 0.09)
= $145.33
Explanation:
At the estimated growth rate of 9%, should DFB increase the dividend payout, the price of equity would amount to $145.33 which is higher than the previous price of $109, so DFB is advised to raise its dividend
