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ivanzaharov [21]
2 years ago
11

For simplicity we hold the price level fixed at 1 and assume that inflationary expectations are fixed at 2%. y is also held cons

tant in this problem. what is the equilibrium interest rate (i)?
Business
1 answer:
Anastasy [175]2 years ago
6 0

Equilibrium interest rates refers to the point where the demand for particular amount of money is equal to the money's supply.
In this case, we just need to do a complete substitution and calculation

4000= 1 X[1200+0.5(6,000) - 200 (i)
]4,000=4,200- 200 (
i)I=<span>1%</span>
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Answer:

A

Explanation:

An investment of $40,000 to generate 2,000 conversions and a CPA of $20 will help Molly with her marketing goal to generate more sales than other investment plan

4 0
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Mobray Corp. is experiencing rapid growth. Dividends are expected to grow at 32 percent per year during the next three years, 22
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Answer:

$1.3794

Explanation:

The computation of the projected dividend for the coming year is shown below:

Last year dividend paid = Do

Expected Dividend in Year 1 (D1) = Do ( 1+g) = Do × 1.32

Dividend in Year 2 (D2) = Do ( 1+g)^2  = Do × 1.32^2

Dividend in Year 3 (D3) =  Do ( 1+g)^3 = Do × 1.32^3

Dividend in year 4 , (D4) = D3 ×  (1+g) = Do × 1.32^3 × 1.22

Now the price at year 4 is

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= Do × 1.32^3 × 1.22 × (1 + 0.07 ) ÷ ( 0.10 - 0.07 )

= Do × 100.08

Use Gordon Growth Model

The Current Price of Stock is

= D1 ÷ ( 1+ R)^1 +D2 ÷ ( 1+ R)^2 + D3 ÷ ( 1+ R)^3 + D4 ÷ ( 1+ R)^4 + P4 ÷ ( 1+ R)^4

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$78 = Do ( 1.2 +1.44 + 1.728 + 1.9165 + 68.36 )

Do = $1.045

Now

Projected Dividend for Year 1 is

= Do × 1.32

= $1.045 × 1.32

= $1.3794

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