Question Completion with Options:
*Re-evaluate the existing commission plan to determine whether you can eliminate the perception of unfairness. Re-evaluate the base salaries by comparing them to other upscale clothing stores.
*Put all salespeople on the same commission plan regardless of tenure. This will clearly establish a strong relationship between performance and reward for all sales personnel. Increase the base salaries of longer-tenured salespeople who have worked for Swazzi more than two years to reinforce the relationship between their experience/loyalty and their rewards.
*Travel to the stores and explain the system in detail to the sales teams. Tell them you will try to clear up any perceived unfairness once you see whether they are serious about selling
Answer:
*Put all salespeople on the same commission plan regardless of tenure. This will clearly establish a strong relationship between performance and reward for all sales personnel. Increase the base salaries of longer-tenured salespeople who have worked for Swazzi more than two years to reinforce the relationship between their experience/loyalty and their rewards.
Explanation:
Longer-term sales personnel should be rewarded differently from newer personnel. But, this differential reward should not be based on the sales commission. The base salary will be more ideal for this tenure reward. This will be in line with the Expectancy Theory which states that employees base their individual levels of effort on what is necessary to perform well and earn rewards within the workplace. The theory also requires that the reward structure is clear with well-defined goals and routine evaluations. The Expectancy Theory helps workers to put in their best because they are looking forward to some well-defined and clear rewards.
Answer:
option (e) 13.95%
Explanation:
Data provided in the question:
Dividend paid, D0 = $6 per share
Current selling price = $80 per share
Dividend growth rate = 6% = 0.06
Now,
Cost of equity = [ D1 ÷ Current price] + Growth rate
= [ ( D0 × (1 + g) ) ÷ $80 ] + 0.06
= [ ( $6 × (1 + 0.06) ) ÷ $80 ] + 0.06
= [ 6.36 ÷ $80 ] + 0.06
= 0.1395
or
= 0.1395 × 100%
= 13.95%
Hence,
The correct answer is option (e) 13.95%
The Latin word "Ceteris Paribus," often used in Economics simply means, with other things being the same or all things being equal.
The major reason why economics often use "Ceteris Paribus" is to eliminate other factors which might complicate an outcome.
For instance, If the price of pork increases, people will purchase less pork, that is Ceteris Parabus. In this instance, ceteris paribus means that the possibility of other factors affecting the sales of pork will not be considered. Other factors such as an announcement were made that pork causes cancer, or the price of Chicken has increased, thereby making pork the best alternative, hence, all these other factors will not be considered, therefore in this situation, economics only wants to consider what happens if the price of pork rises while keeping all other factors the same.
