Domestic business refers to the business where economic transactions are conducted within the geographical boundaries of the one country. International business refers to the business where economic transactions are conducted across border with several countries in the world.
Answer:
The accounting rate of return is 10%
Explanation:
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Answer:
Shop for an account that earns high interest
Explanation:
Ariel should shop for an account that earns the highest interest rates in the market. With an account that earns high interest, Ariel does not need to save the entire amount required to purchase the computer. She will save a big percentage while the interest earned will add to the rest of the amount.
An account that compounds interest would be ideal for her. Compounding interest means that interest earned in the year is added to the principal amount. The principal amount increases, so does interest in the preceding seasons.
Answer:
P8 = $105.5994 rounded off to $105.60
Explanation:
The constant growth model of DDM is used to calculate the price of a stock whose dividend growth rate is constant. The DDM values a stock based on the present value of the expected future dividends from the stock. The formula for the price of stock today under this model is,
P0 = D0 * (1+g) / (r - g)
Where,
- D0 * (1+g) is the dividend for the next period of D1
- r is the required rate of return
- g is the growth rate in dividends
80 = 5 * (1+g) / (0.1 - g)
80 * (0.1 - g) = 5 * (1+g)
8 - 80g = 5 + 5g
8 - 5 = 5g + 80g
3 = 85g
3/85 = g
g = 0.03529 or 3.529% rounded off to 3.53%
To calculate the price today, we use D1. Thus, to calculate the price 8 years from now or P8, we will use D9
P8 = 5 (1+0.0353)^9 / (0.1 - 0.0353)
P8 = $105.5994 rounded off to $105.60
