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agasfer [191]
3 years ago
14

Mr. Smith put his laptop up for sale. He is aware of the fact that the laptop malfunctions frequently. However, none of the pote

ntial customers who came to buy the laptop were able to discover the problem and one of them actually bought it at a remunerative price. This occurred due to ________.
a) the selective retention of information by sellers the presence of positive
b) externalities the presence of negative
c) externalities the presence of asymmetric information
Business
1 answer:
zaharov [31]3 years ago
5 0

Answer: The presence of asymmetric information

                                               

Explanation:  In simple words, asymmetric information refers to the situation when one party to a contract have extra information regarding a subject than the other party of the contract.

Asymmetric information creates the potential of misconduct from the leading party as they can easily cheat the other party by concealing that important information.

In the given case, Mr. Smith was aware that his laptop is not working properly but still he sold its to a customer who was not aware of it. Thus, we can conclude that the correct option is C.

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Compare a property rights system in which people are allowed to keep one-third of the monetary rewards of their labor with a sys
Veseljchak [2.6K]

Answer:

latter, latter

Explanation:

Property rights system determine how economic resources are used and owned by individuals, associations, collectives, or governments.

It also includes intellectual property such as inventions or ideas.

Such rights reduce destructive competition for control of economic resources. and replace this competition by peaceful means.

In a system where people are allowed to keep one-third of the monetary rewards of their labor with a system in which they keep two-thirds, we should expect more entrepreneurship under the <u>latter</u> system and faster real economic growth under the <u>latter</u> system.

8 0
3 years ago
ABC Corp. has just paid a dividend of $0.26. ABC has an annual required return of 12%.
Elis [28]

Answer:

a. If dividends are annual and expected to be constant, what is the intrinsic value (fair price) of ABC stock?

P₀ = $0.26 / 12% = $2.16667 = $2.17

b. What is ABC's dividend yield?

$0.26 / $2.17 = 12%

c. From now on, assume that the dividend of 0.26 was a quarterly dividend. What is the quarterly discount rate?

12% / 4 = 3%

d. What is the intrinsic value if dividends are constant and quarterly?

P₀ = $0.26 / 3% = $8.66667 = $8.67

e. We now think that dividends will grow by 0.3% from quarter to quarter. The firm just paid the quarterly dividend of 0.26. What is the intrinsic value of ABC stock?

P₀ = ($0.26 x 1.003) / (3% - 0.3%) = $9.6585 = $9.66

f. A different analyst thinks that ABC's dividends will grow by 5% for the next 4 quarters, and then grow by 0.3% thereafter. What is the intrinsic value?

Div₀ = $0.26

Div₁ = $0.273

Div₂ = $0.287

Div₃ = $0.301

Div₄ = $0.316

Div₅ = $0.317

terminal value in 4 quarters = $0.317 / (3% - 0.3%) = $11.74

P₀ = $0.273/1.03 + $0.287/1.03² + $0.301/1.03³ + $0.316/1.03⁴ + $11.74/1.03⁴ = $0.265 + $0.271 + $0.275 + $0.281 + $10.43 = $11.522  

8 0
2 years ago
You've been introduced to Amy at a local business and Professional Women's meeting After you've chatted with her for a few minut
postnew [5]
Ask her out for dinner
3 0
2 years ago
Read 2 more answers
The rickerts decided to set up an account for their daughter to pay for her college education. the day their daughter was born,
Free_Kalibri [48]
After n years, the deposit made at birth will have a value equal to;

FV1 = C(1+r)^n = 1000(1+0.018)^n = 1000(1.018)^n

After n years, the  yearly deposits made at every birthday will have a value equal to;

FV2 = P{(1+r)^n-1}/r = 750{(1+0.018)^n-1}/0.018 = 41666.67 {(1.018)^n-1} = 41666.67 (1.018)^n -41666.67

Total FV = FV1+FV2 = 1000(1.018)^n+41666.67(1.018)^n-41666.67 = 42666.67 (1.018)^n - 41666.67
7 0
3 years ago
What kind of economy uses a free-enterprise system?
alekssr [168]

Answer:

The U.S. economy is a free enterprise system.

Explanation:

That means that individuals — and not the government — own most of our country's resources.

5 0
2 years ago
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