Patrick expects that each person he hires for his online business to be involved in studying trends involving new technology, c
1 answer:
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Answer:
option (d) $18.24
Explanation:
Data provided in the question:
Dividend paid last year = $1.2
Dividend growth rate for 3 years, g = 10%
After 3 years Dividend growth rate, g' = 4%
Required return, r = 12%
Now,
Present vale factor, PVF =
Year Dividend PVF @12% Dividend × PVF
1 1.2(1+.10)= 1.32 0.89286 1.1786
2 1.32(1+.10)= 1.452 0.79719 1.1575
3 1.452(1+.10)= 1.5972 0.71178 1.1369
3(Terminal value) 20.7636 0.71178 14.7791
=====================================================
Current share price ∑(Dividend × PVF ) ≈ $18.24
Note:
Terminal value at year 3 =
=
= $20.7636
Hence,
The correct answer is option (d) $18.24
Answer:
d. the demand curve has shifted to the right.
Explanation:
An increase in demand is associated with a rightward shift of the demand curve.
A decrease in demand leads to a leftward shift of the demand curve.
Some of the factors that cause an increase in demand :
1. Increase in income if the good is a normal good.
2. Expectation of an increase in price in the future.
3. Increase in price of the substitute.
An increase in Quanitity demanded leads to an upward movement along the demand curve. Only changes in price leads to a movement along a demand curve.
I hope my answer helps you
