Answer:
The correct answer is: The law of comparative advantage.
Explanation:
Comparative advantage refers to the situation when an individual, a firm, or a nation can produce a good or service at a comparatively lower opportunity cost.
With the opening up of trade the nation or individual will produce and trade the good it has a comparative advantage in or the good it specializes in producing.
It will export this good to others and import the goods it has a higher opportunity cost in producing. In this way, both the nations or individuals will be able to consume beyond their production possibilities curves.
So, both of them will be able to gain from trade.
Answer:
Explanation:
The <em>value</em> of a <em>stock</em> equals the flow of the <em>dividends</em> discounted at the expected rate of return.
The formula to calculate the value of a stock when the dividends are expected to <em>grow at a constant rate</em> g, when the expected<em> rate of return</em> is r, is:
Here you know value = $29.00 per share, dividend at the end of the first year = $ 2.45 per share, constant rate at which the dividend is expected to grow r = 6.50%. Then, you can solve for r:
Substitute: