Answer:
$52
Explanation:
Data provided as per the question
Recent dividend = $2
Market rate of return = 8%
Growth Rate = 4%
(Its expected to increase so it will be (1 + 4%) = 1.4%
The computation of price is shown below:-
Price = Recent dividend × (1 + Growth rate ) ÷ (Cost of equity - Growth rate)
= ($2 × 1.04) ÷ (0.08 - 0.04)
= $2.08 ÷ 0.04
= $52
Answer:
Price elasticity of demand for Adam=0
Price elasticity of demand for Barb=1
Explanation:
Price elasticity of demand = %age change in demanded QTY / %age change in demanded price
The price is not important for Adam, and he demands a fixed quantity, hence his demand curve is vertical. A perfectly vertical demand curve is can inelastic demand curve and has price elasticity =0
The quantity is not important for Barb, and he demands a fixed price, hence his demand curve is horizontal. A perfectly horizontal demand curve is has price elasticity =1
Answer:
a. Pay back period is 4 years and 18 days
b. Net present value is - $5,909. Since the NPV is negative, the project should be rejected.
Explanation:
Note: See the attached for the calculation tables of a and b.
a. Pay back period = 4 years and [($2,565/$51,244)*365 days] = 4 years and 18 days approximately.
A town might decide to issue bonds to B) to build new roads or bridges. A town will achieve a specified amount of money by issuing the bond and there must be an obvious source for returning the bond value until its maturity date. Therefore, building projects or other projects related to the town's infrastructure would be the most appropriate reason for a town to issue bonds.
Answer:
The correct answer is (E)
Explanation:
MARS chocolate company will apply all the methods except financial ratios. Financial ratios cannot be used to forecast future sales in this specific situation. Financial ratios are used to analyse, and examine the current financial strength of an organisation, and it helps to compare the financial situation of a company. Financial ratios are used specifically for comparison between organisation’s current and preceding financials.
