Axel steals a business law textbook from beth. curt, who does not know that the book is stolen, buys it from axel. curt has comm
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Answer:
cost of equity = 13%
Explanation:
With the info given, we will use cost of equity formula from Dividend Growth Model. THis is given by:
Where D_1 is the next year dividend or D_1 = D_0(1+g)
P_0 is current stock price
g is the growth rate
Since D_0 (dividend this year) is 4.20 and g = 6.4% or 0.064, we can calculate D_1:
Current share price is 68, so we can now calculate cost of equity:
Hence,
cost of equity = 13%
Answer:
Explanation:
In response to the price rise from $50 to $60, the quantity demanded of product X drops from 400 to 300 units. We know that price elasticity of demand is a measure of the responsiveness of changes in demand as a result of a price change. Thus,
% change in price =
= = 0.1818
% Change in Quantity demanded
=
=
= -0.2857
Thus,
Price elasticity of demand =
=
= -1.5715
Therefore, the price elasticity of demand = -1.5715