I think the answer is true, but if I’m wrong sorry
Answer:
The correct answer is letter "B": Understanding.
Explanation:
While composing a text, the understanding buffering technique is helpful to show the reader the writer is concerned about what is being exposed. The buffering must provide a smooth transition to the explanation of the text. Thus, it must be written the most accurate possible.
Answer: Marginal cost is $27 and market price is $27
Explanation:
In the long run, perfectly competitive industries make zero economic profit. This means therefore that Average cost will be the same as the Market price so Market price will be $27.
Firms in a perfectly competitive industry will produce at a rate where Marginal revenue will equal marginal cost in order to maximise profit.
In a perfectly competitive industry, firms are price takers which means that the Market price is also the same as the Marginal revenue. The Market price will therefore be equal to marginal cost which means that Marginal cost will also be $27.
The opportunity costs associated with the use of resources owned by a firm are implicit costs.
Answer:
a). Future price of stock in five years=$98.97
b). The current stock price will not be affected by an increase of $1 in stock price, this is because increase in stock price is a function of the expected dividend growth rate and not the current stock price
Explanation:
a). Use the expression for calculating the required rate of return as to determine the expected dividend growth rate follows:
RRR=(EDP/SP)+DGR
where;
RRR=required rate of return
EDP=expected dividend payment
SP=share price
DGR=dividend growth rate
In our case:
RRR=10%=10/100=0.1
EDP=$1
SP=$65.88
DGR=y
replacing in the original expression;
0.1=(1/65.88)+y
y=0.1-(1/65.88)
y=0.0848
The expected dividend growth rate=8.48%
Future price of stock=Current price(1+DGR)^n
where;
Current price=$65.88
DGR=8.48%=8.48/100=0.0848
n=5 years
replacing;
Future price of stock=65.88(1+0.0848)^5
Future price of stock=$98.97
b). The current stock price will not be affected by an increase of $1 in stock price, this is because increase in stock price is a function of the expected dividend growth rate and not the current stock price
