The amount of the stock price that will be reflected in the PVGO is $10
The value of an organization's potential future growth is symbolized by the acronym PVGO, or "present value of growth opportunities." It represents the potential value for the organization by reinvesting its earnings back into the business.
Expected Dividend payment (D) = $2.50
Total Earnings (E) = $4
Rate of return (ROR) = 20%
Step 1. Using no growth rate (GR), computing the stock price (SP)
Since the growth rate is not specified, 0% is taken as the default value.
The stock price (SP) = E/ROR
= $4 / 20%
Stock price = $20.
Step 2. Computing the SP reflected in PVGO.
So, total SP with no GR
= $30 - $20
Stock price with no growth rate = $10
Hence, the $10 will be reflected in the PVGO
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The answer is b many people want this product and havent purchased it yet
Examples<span> of the Supply and </span>Demand<span> Concept. Supply refers to the amount of goods that are available. </span>Demand<span> refers to how many people want those goods. When supply of a product goes up, the price of a product goes down and </span>demand<span> for the product can rise because it costs loss.</span>
Answer:
The correct answer is letter "C": Spreading risk by investing your money in a variety of funds and investment options.
Explanation:
Portfolios are <em>pools of different assets that aim lowering the risk inherent in investments</em>. Portfolios tend to be managed by professional who work on behalf of investors an can provide suggestions on what assets to buy and sell according to the fluctuations of the market.
Answer:
a. $700,000
b. 6/7 or 85.7%
c. No they will not.
Explanation:
a. Jacobs will earn the normal salary that the other designers in the other companies are getting in addition to the incremental income he brings to the company as a result of his talents.
Incremental income = Revenue with Jacobs - Revenue without Jacobs
= 1,000,000 - 400,000
= $600,000
Jacobs earnings = Normal designer earnings + incremental income
= 100,000 + 600,000
= $700,000
b. Economic rent is the excess amount that the company is paying Jacobs over what it should normally cost to get a designer.
Normal cost of designer is $100,000. Company is therefore paying an economic rent of $600,000.
Proportion of Jacobs salary that is economic rent = 
= 
= 6/7 or 85.7%
c. The company hiring Jacobs will not be making an economic profit because for them to make an economic profit they would have to be making more than the $400,000 that the other firms make. They cannot make this amount because for them to do so they would have to reduce the amount they pay Jacobs. If they do so, Jacobs would leave for greener pastures and then they would be making the same $400,000 that the rest are making.