I believe the answer to your question is C.
Hope I helped! Plz mark brainliest! Have a great day!
Answer:
If the current earnings per share of TargetCo. are $2.10, and the times earnings multiple is 12, the relative valuation should result in a $2.10 x 12 = $25.20 per stock. This means that the premium per stock = $25.20 - $21 = $4.20, and the total premium paid for all the 1.9 million shares = $7.98 million.
Elastic.
This is
the formula for elasticity:
Elasticity
= (Quantity variation/Quantity)/(Price variation/Price)
Inelastic
demand is the one in which a variation in price doesn’t lead to an important
variation in the quantity bought by consumers. So, in the formula, numerator is
much smaller than denominator, so the fraction is lower than 1. That happens
with necessary goods (typically, food).
On the
contrary, elastic demand is the one in which a variation in the price leads to
an important variation in the quantity bought by consumers, and that means the
fraction is higher than 1. So if I sell the product at a lower price, I will
sell much more product.
Considering the formula:
R = P*Q, when demand is elastic,
I will
have much more sold quantity with just a little lower price, which leads to a higher
revenue.
