Answer:
$34.46
Explanation:
In this Question there is Highest value of 10% and the probability of 90%.
we will use following formula to calculate the highest value of the stock
z value = ( x - mean ) / Standard deviation
where
x = the highest value
z score value at 10% = 1.28
Placing value in the formula
1.28 = ( x - $29.51 ) / $3.87
1.28 x $3.87 = x - $29.51
$4.9536 = x - $29.51
x = $4.9536 + $29.51
x = 34.4636
Answer:
Cost of equity = 10.7%
Explanation:
<em>We will work out the required rate of return using the the dividend valuation model. The model states that the value of a stock is the present value of the future divided discounted at the cost of equity.
</em>
The model is given below:
P = D× (1+g)/(r-g)
P- price of stock, D- dividend payable now, g- growth rate in dividend, r- cost of equity
So we substitute
130 = 5.50× (1+r)/(r-0.06)
cross multiplying
(r-0.06)× 130 = 5.50 × (1+r)
130 r- 7.8 = 5.50 + 5.50r
collecting like terms
130 r - 5.50r=5.50 + 7.8
124.5 r= 13.3
Divide both sides by 124.5
r =13.3 /124.5= 0.1068
r=0.1068 × 100= 10.7%
Cost of equity = 10.7%
<u>Answer:</u>
less
<u>Explanation:</u>
The law of diminishing marginal utility states that, as consumption of a good or service increases, its marginal utility decreases.
Answer:
Inflation= 3.3%
Explanation:
Giving the following information:
Suppose a typical consumer buys 20 units of food and 10 units of clothes in the year 2307, when the price per unit of food is 100 and the price per unit of clothes is 200. In 2308, when the typical consumer buys 20 units of food and 20 units of clothes, the price of food is 110, while the price per unit of clothes remains at 200.
Inflation= (310 - 300)/300= 0.033= 3.3%
