Answer:
cost of capital 16%
Explanation:
SML formula:
r_f = 3%
β = 1.3
r_m = 13%
0.03 + 1.3(0.13-0.03)
firm's required return = .16 = 16%
Most people are aware of someone at school or at work with whom they don’t really associate. Pick someone in your school that yo
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Answer:
- <em>The slope of the demand curve at point A is </em><u><em> </em></u><u>- $0.40/unit</u>
- <em>The slope of the demand curve at point B is </em><u>- $0.14/unit</u>
Explanation:
See the file attached with the figure corresponding to this question.
<em>The slope of a curve</em> at a given point is the slope of the line tangent to the curve at that point.
<em><u>Point A:</u></em>
The tangent line to the <em>demand curve at point A is</em> drawn and passes through the points (20, 34) and (45, 24).Then, the slope is:
- slope = rise / run = ΔP / Δq = $ (34 - 24) / (20 - 45) units
- slope = - $10 /25units = - $2/5units = - $0.40/unit.
The minus sign indicates the that price decreases when the quantity increases
<u><em>Point B:</em></u>
<em>The tangent line to the demand curve at point B</em> passes through the points (90, 12) and (140, 5).Then, the slope is:
- slope = rise / run = ΔP / Δq = $ (12 - 5) / (90 - 140) units
- slope = - $7 /50units = - $7/50units = - $0.14/unit.
Again, the negative sign indicates that when the number of units increase the price decreases.
