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3 years ago

Marginal cost pricing rule is a rule that sets price _ marginal cost to achieve _ output.

Business

1 answer:

melamori03 [73]3 years ago

5 0

Answer:

1) Equal to

2) Efficient

3) Equal to

4) Total

Explanation:

1) Marginal cost pricing is when you price the good equal to the extra cost of producing an extra good, so for example if I am a shoe manufacturer and the cost of producing an extra pair of shoe is $4 and I price the pair of shoe at $4 I am using marginal cost pricing.

2) When the producer is using marginal cost pricing the output produced is efficient as there is no dead weight loss and efficient level of output is produced.

3,4) If I produce 10 pairs of shoes and they cost me $500 then my average total cost for the pair of shoes is 500/10 = $50 and if I keep the price of the shoe at $50 I am using average cost pricing, so average cost pricing is keeping price equal to the average total cost.

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Which one of the following stocks is correctly priced if the risk-free rate of return is 3.9 percent and the market risk premium

Evgesh-ka [11]

Answer:

E 0.95 11.88%

Explanation:

First we have to calculate the market return from market risk premium using the following formula:

Market risk premium=Market return-Risk free return

Market return=3.9%+8.4%=12.3%

Above market return will be applied to the Capital asset pricing model formula for the purpose of calculating expected return.

CAPM=Risk free return+Beta(Market return-Risk free return)

Expected return=3.9%+0.77(12.3%-3.9%)=10.37%

Incorrect because the expected return is 10.37% as compared to the 7.86% given in question.

Expected return=3.9%+1.55(12.3%-3.9%)=16.92%

Incorrect because the expected return is 16.92% as compared to the 12.65% given in question.

Expected return=3.9%+1.36(12.3%-3.9%)=15.32%

Incorrect because the expected return is 15.32% as compared to the 17.33% given in question.

Expected return=3.9%+1.33(12.3%-3.9%)=15.072%

Incorrect because the expected return is 15.072% as compared to the 11.93% given in question.

CAPM=3.9%+0.95(12.3%-3.9%)=11.88%

Correct because the expected return is 11.88% as given in question.

So the correct option is E.

7 0

3 years ago

You buy a stock for which you expect to receive an annual dividend of $2.10 for the fifteen years that you plan on holding it. a

kap26 [50]

<span>You are given an annual dividend of $2.10 for the fifteen years that you plan on holding it. Also, after 15 years, you are given to sell the stock for $32.25. You are asked to find the present value of a share for this company if you want a 10% return. You have to mind that the future stock for 15 years is $32.25. You are not only going to mind the present value of the annuity at $2.10 but also the $32.25.

With the interest of r = 10% and number of years of n = 15, we get
PVIFA = 7.6061.

For annuity we have,
$2.10 * 7.60608 = $15.973

For $32.35 with r = 10% and n = 15
PVIF = 0.239392

Thus for the present value of selling price,
$32.25 * 0.239392 = $7.720

Thus the present value of the share
P = $15.973 + $7.720
P = $23.693
</span>

6 0

3 years ago

Setrakian Industries needs to raise $87.9 million to fund a new project. The company will sell bonds that have a coupon rate of

Goryan [66]

Answer:

47,884.79 units of bonds

Explanation:

The units to be sold to arise $87.9 million will be equal to the

$87.9 million / divided by the bond price

The price of a bond is the present value (PV) of the future cash inflows expected from the bond discounted using the yield to maturity. These cash flows include interest payment and redemption value

The price of the bond can be calculated as follows:

Step 1

PV of interest payment

Semi-annual coupon rate = 5.92/2 = 2.96%

Interest payment =2.96%× 2,000= 59.2

Semi annual yield = 6.67%/2 = 3.335

PV of interest payment

= A ×(1- (1+r)^(-n))/r

= 59.2× (1-(1.03335)^(-2×20))/0.03335)

= 1,297.22

Step 2

PV of redemption value

PV = FV× (1+r)^(-n)

= 2,000 × (1+0.03335)^(-2× 20)

= 538.43

Step 3

Price of bond =

= 1297.22 + 538.43

= $1835.65

Step 4

Units to be used

= $87.9 million/ $1,835.65

= 47,884.79 units

4 0

4 years ago

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A business may survive and prosper during the growth stage even though it has neither differentiated its offering from competito

Elan Coil [88]

Answer:

B. Getting caught in the transition period without a clear strategic advantage.

6 0

3 years ago

20 points :)

Genrish500 [490]

Answer:

i would go with A as the answer for this question

Explanation:

7 0

3 years ago

Read 2 more answers

Marginal cost pricing rule is a rule that sets price​ _____ marginal cost to achieve​ _____ output.

Marginal cost pricing rule is a rule that sets price _ marginal cost to achieve _ output.