<span>If an economy has just suffered a serious recession, we can conclude that the unemployment rate is high. After the recession when the real gdp is expanding, we can safely assume that more workers are needed to produce the gdp, which means that the unemployment rate will drop.</span>
Answer:
$75
Explanation:
As per the data given in the question,
Ke = risk free rate of return + beta×(market portfolio - risk free rate of return)
= 8% + 0.60 × (18% - 8%)
= 8% + 6%
= 14%
= 0.14
Now using the constant-growth DDM model :
Intrinsic value of the stock = Dividend ÷ (Ke - expected growing rate)
= $3 ÷ (0.14-0.10)
= $75
Hence, Intrinsic value of the stock is $75.
Answer:
the required rate of return on the stock is 12.52%
Explanation:
The computation of the required rate of return on the stock is shown below:
= (Next year Dividend ÷ current stock price ) + growth rate
= ($1.68 ÷ $ 22.35 ) + 0.05
= 0.075 + 0.05
= 12.52%
Hence, the required rate of return on the stock is 12.52%
We simply applied the above formula so that the correct value could come
And, the same is to be considered
Answer:
Variable costs
Explanation:
Variable costs is the term that describes business costs that vary with the production level. An increase in output increases the variable costs. Variable costs are progressive and increase or decrease with the production volume.
Examples of variable costs include raw material and distribution costs. Variable costs contrast with fixed costs, which remain constant throughout a financial period.
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