Answer:
b. $35.02
Explanation:
The first dividends will be calculate by multiplying by the grow rate and bring them to present value:
first year:
D0 x (1+g)
1.75 x 1.13 = 1.977500
Then we calcualte the present value:
1.9775/1.12 = 1.7656
second year:
D1 x (1+g)
1.9775 x (1.13) = 1.7656
PV: 1.7814
Finally,, we calcualte the present value of the next dividends using the dividend grow model
We calcualte next year dividneds:
D2 x (1+g) = D3
1.9775 x 1.06 = 2.368650
g = 6%
and return 12%
39.47749167
then, we calcualte the present vale:
PV = 31.4712
Finally, we add all these values
1.7656 + 1.7814 + 31.4712 = 35,0182 = 35.02
This will be the estimate current stock price.
When the Federal
reserve wishes to reduce interest rates, it increases the amounts of funds at
commercial banks. They reduce discount rate to lend out more if their reserves.
Increasing interest rate in order to reduce an inflation.
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Answer:
The correct option is is A, predatory pricing
Explanation:
Predatory pricing is an illegal approach to pricing where a firm fixes a very low price in order to send competitors out of business.
This is very applicable to a firm that has economies of scale where its cost per unit reduces as more and more units are produced, making it possible to undercut competitors without feeling much impact in profitability.
This approach is against the anti-trust law as it paves for a monopoly market,where only one firm operating in the market determines the price which is not likely to be favorable to consumers
Yes, Jerry is likely to qualify, since his yearly income is below the median annual income of New Mexico.