Answer:
Increase demand
Explanation:
Tastes and preferences of the consumers is one of the determinant of demand that would shift the demand curve rightwards or leftwards.
Now, if there is an increase in the taste of the consumers for a good then as a result this would increase the market demand for that particular good. This would also shifts the demand curve of that good rightwards.
If there is a positive change in the taste of the consumers for a good then they will buy more quantity of that good.
Common between optimization using total value and optimization using marginal analysis is:
Both techniques require the conversion of all costs and benefits into a common unit of measurement.
What is the principle of optimization at the margin?
The Principle of Optimization at the Margin states that an optimal feasible alternative has the property that moving to it makes you better off and moving away from it makes you worse off.
Optimization using total value:
calculates the change in net benefits when switching from one. alternative to another.
optimization using marginal analysis:
calculates the net benefits of. different alternatives.
Total Value analysis :
has a wide range of applications. The analysis can be used to assess an organization's key impacts, or provide more detailed information such as an assessment of the life cycle impacts of a product.
marginal analysis:
is an examination of the additional benefits of an activity compared to the additional costs incurred by that same activity. Companies use marginal analysis as a decision-making tool to help them maximize their potential profits.
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Answer:
$48.34%
Explanation:
Data provided in the question
Growth rate = 5%
Required return = 12%
Dividend = $8.65
Based on the above information,
The computation of the current price is shown below:-
Current Price = Dividend × (1 + Growth Rate) ÷ (Required Return - Growth Rate)
= $8.65 × (1 + (-5%)) ÷ (12% - (-5%))
= $48.34%
Therefore for computing the current price we simply applied the above formula.
Answer:
Stock A will be preferable for the risk averse Investors.
Explanation:
The reason is that risk is the measure of the vulnerability of the returns on the investment made which means if the return on the investment has greater vulnerability of returns then it is highly risky. So the risk averse investor would prefer stock A with lower risk.
(Special comments:
It must be noted that the higher return shows that the investment is also highly risky because nobody is going to give you more with low risk associated investments. This means lower return on Stock B is also preferable here for the risk averse investor because it carries lower risks.)
