Sometimes when speaking, your thoughts get very jumbled, if you're at all like me. Organizing your thoughts can well, organize your thoughts! :)
Answer:
the intrinsic value of the stock is $60
Explanation:
The computation of the intrinsic value of the stock is as follows:
But before that the cost of equity is
The Cost of Equity is
= Risk Free Rate + Beta × (Market Return - Risk Free Rate)
= 8% + 0.80 × (18% - 8%)
= 16%
Now
Intrinsic Value is
= Next year Dividend ÷ (Rate of Return - Growth rate)
= $3 ÷ (16% - 11%)
= $60
hence, the intrinsic value of the stock is $60
Answer:
True
Explanation:
This is true that no person shall engage in the business of finance broker or finance lender without obtaining a license from the commissioner. All of them shall comply with dbo rules and regulation. if they fail to comply they may face a fine or cancelation of license.
When the current output is more than the potential output the fed is likely to enact decreasing reserves to increase interest rates.
The reason why they would have to do this is based on the fact that when the actual output in the economy is more than the potential output, It means that there is an inflationary gap.
In order to close this gap, the fed would have to reduce the aggregate demand, thereby raising the rate of interest. This would in turn lead to the fall in consumption and fall in saving.
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Answer:
<u>Monopoly</u>
P = $20.00
Q = 10,000
<u>Socically Efficient:</u>
P = $16.80
Q = 14,000
The monopoly generates a deadthweight loss to maximize their gain.
In the socially efficient situation, there is no deadthweight loss threfore this makes the economy as a whole better.
Explanation:
Price = 28 - 0.0008Q
Marginal Cost = 0.0012Q
Revenue: P x Q = (28 - 0.0008Q) x Q = 28Q - 0.0008Q²
Marginal Revenue:
R' = R(q) / dq = 28 -0.0016Q
We want to produce and sale until marginal revenue matches marginal cost:
28 -0.0016Q = 0.0012Q
28 = 0.0028Q
Q = 28 / 0.0028 = 10,000
P = 28 - 0.0008 (10,000) =
P = 28 - 8 = 20.00
The social efficiency will be that Price equals Marginal Cost.
28 - 0.008Q = 0.0012Q
28 = 0.0020Q
28 / 0.0020 = Q = 14,000
P = 28 - 0.0008(14,000) = 28 - 11.2 = 16,8
