Answer:
$381.49
Explanation:
To calculate the stock price in 9 years from now, we can use the growing perpetuity formula but adjusted to year 9
Present value year 9 = current dividend (1 + growth rate)⁹ / (return rate - growth rate) = $13 (1.078)⁹ / (14.5% - 7.8%) = $25.56 / 6.7% = $381.49
the expected price of IBM's stock in 9 years is $381.49
Answer:
See as below
Explanation:
1. A graphical object showing the relationship between the price of a good and the amount that sellers are willing and able to supply at various prices.
Supply curve: <em>The supply curve is upward sloping. It originates from the bottom left corners and rises as prices increase.</em>
<em> </em>
2. The claim that other things being equal, the quantity supplied of good increases when the price of that good rises.
Law of supply:<em> The law of supply asserts that there is a positive or direct relationship between price and quantity supplied. Firms are willing to supply more at higher prices to make more profits.</em>
3. The amount of a good that sellers are willing and able to supply at a given price.
Quantity supplied:<em> </em><em>Quantity supplied denotes a numerical value that firms are willing to sell at the given price. A high selling is a motivation for producers to supply more. </em>
4. A table showing the relationship between the price of a good and the amount of it that sellers are willing and able to supply at various prices. supply schedule
Supply schedule: <em>A supply schedule shows the quantities that producers are willing to sell at different prices in a period. It illustrates how the price affects the quantities supplies are willing to sell.</em>
Answer:
PV of lease annuity is $25000
Explanation:
As the paymengt will be made at the end of the year, the annuity is an ordinary annuity. We will calculate the present value of the ordinary annuity using the following formula,
PV Annuity = PMT * [( 1 - (1+r)^-n) / r]
Where,
- PMT is periodic payment
- r is discount rate per peiod
- n is number of periods
Thus,
PV of annuity = 3895.5 * [( 1 - (1+0.09)^-10) / 0.09]
PV of annuity = $24999.985 rounded off to $25000
Answer:
Total revenue will increase in all the situations.
Explanation:
A) PED = 1.2, the price of the good decreases, then the quantity demanded will increase in a larger proportion. For example, the price = $1 and the quantity demanded = 100 units, total revenue is $100. The price decreases 10% to $0.90, then the quantity demanded will increase 12% to 112 units, total revenue is $100.80
B) PED = 0.5, the price of the good increases, then the quantity demanded will decrease in a smaller proportion. For example, the price = $1 and the quantity demanded = 100 units, total revenue is $100. The price increases 10% to $1.10, then the quantity demanded will decrease 5% to 95 units, total revenue is $104.50
C) PED = 3, the price of the good decreases, then the quantity demanded will increase in a larger proportion. For example, the price = $1 and the quantity demanded = 100 units, total revenue is $100. The price decreases 10% to $0.90, then the quantity demanded will increase 30% to 130 units, total revenue is $117
Answer: 17.25%
Explanation:
Question is incomplete but given the variables involved, the company's return can be calculated by using the Capital Asset Pricing Model the formula of which is;
Required return = Risk free rate + beta ( market risk premium)
Lets assume a beta of 1.5 ( you'll use your beta).
Required return = 4.5% + 1.5 * 8.5%
= 17.25%