Answer:
TRUE
Explanation:
Using the Gordon Growth Model, we can adequately demonstrate that the dividend and price of a share are both components of the cashflow to be considered in share valuation.
Price per share is found to be D(1) / (r - g)
where:
Do = Dividend now
D1 = Dividend in year 1
g = growth
r = required return
So we see that the market price of a share which determines the market capitalization of a company is predicted by a growth in dividends. So the benefits of holding a share will not only depend on how much the share is sold now as against how much it can be sold in the future (in order to make a gain), but also how much you can be earning until such sale occurs.
Answer:
Price skimming.
Explanation:
Price skimming is a pricing strategy in which an organization gradually lowers it's selling price after initially charging it's customers a high price in order to attract more price-sensitive customers. It is mostly used by a first-mover who faces lesser competition in business.
In this scenario, Cosmeticon had no competitors in that segment of the Indian cosmetics market, so it set a very high price for its products in order to reach the premium, price-insensitive segment of the market.
Answer:
cab fares will be higher.
Explanation:
The supply of cabs would fall as a result of the limit. The fall in supply would lead to a rightward shift of the demand curve for cabs.
As a result, equilibrium price (cab fares) would increase and equilibrium quantity would fall.
subway is a substitute for cabs
Due to the increase in the price of cabs, there would be an increase in the demand for subway. This would lead to a rise in equilibrium price and quantity
Equilibrium price will fall; equilibrium quantity will fall.
What does Equilibrium price mean?
An Equilibrium price, also known as a market-clearing price, is the consumer cost assigned to some product or service such that supply and demand are equal, or close to equal.
The manufacturer or vendor can sell all the units they want to move and the customer can access all the units they want to buy.
What is Equilibrium quantity?
Equilibrium quantity is when there is no shortage or surplus of a product in the market.
Supply and demand intersect, meaning the amount of an item that consumers want to buy is equal to the amount being supplied by its producers.
Learn more about Equilibrium price and quantity here:
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Answer:
b. Debt ratio
Explanation:
The liquidity ratio includes the current ratio, quick ratio, etc
where,
Current ratio = Total Current assets ÷ total current liabilities
And, Quick ratio = Quick assets ÷ total current liabilities
where,
Quick assets = Cash and cash equivalents + short-term investments + Accounts receivable (net)
These two ratios check the liquidity of the business organization whereas debt ratio shows a relationship between the total liabilities and the total assets. It checks the leverage of the firm whether it is capable to repay the borrowed amount or not
Hence, option b is correct
