Answer:
The value of the stock = $19.64
Explanation:
According to the dividend valuation model, <em>the value of a stock is the present value of the expected future cash flows from the stock discounted at the the required rate of return.</em>
Year Workings Present value(PV)
1 $1 × (1.22) × 1.11^(-1) = 1.10
2 $1 × (1.22)^2 ×(1.11)^(-2) = 1.21
3 $1 × ((1.22)^2 × (1.05))/0.11-0.05) = 21.35 ( PV in year 2 terms)
PV (in year 0) of Year 3 dividend = 21.35 × 1.11^(-2)
= 17.33 (see notes)
<em>The value of the stock</em> = $1.10+ $1.21 + 17.3
= $19.64
Notes:
<em>Note the growth applied to year 3 dividend gives the PV in year 2 terms. So we need to re-discount again to year 0.</em>
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The value of the stock = $19.64
Answer:
Prices ensure an equal distribution of goods and services among consumers.
Explanation:
The price mechanism helps in the efficient allocation of resources. There are a number of functions performed by the price mechanism. Prices send signals regarding resources. An increase and decrease in prices reflect surplus and deficit.
Price balances the demand and supply of a product. Price is inversely related to demand and positively related to the supply of a product. It is determined by the interaction of demand and supply and helps in balancing supply and demand.
For instance, an increase in demand would increase the price, this higher price will motivate the suppliers to increase quantity supplied thus balancing demand and supply.
Price helps in coordinating economic activities and helps buyers and sellers in decision making. However, they do not help in equal distribution of goods and services among consumers.
Answer:
128,000 units
Explanation:
The calculation of the equivalent units of production using the weighted average method is given below:
= Total units of finished goods × completion percentage + ending work in process units × completion percentage
= 107,000 units × 100% + 42,000 units × 50%
= 107,000 units + 21,000 units
= 128,000 units
Hence, the equivalent units of production of direct labor is 128,000 units.
There are different aspect of management. The development of this strategy falls under the planning function of management.
<h3>What is the planning function of management?</h3>
Planning is simply known to be a function of management that entails putting out objectives and knowing the right course of action to achieving the stated objectives.
Planning often needs managers to be very much aware of environmental conditions that faces their organization and predict future conditions.
Conclusively, principles of management is grouped into the four major functions such as;
- Planning,
- Organizing
- Leading
- Controlling
Learn more about planning function from
brainly.com/question/16118348
Answer:
Allocative inefficiency.
Explanation:
Factors of production can be defined as the fundamental building blocks used by individuals or business firms for the manufacturing of finished goods and services in order to meet the unending needs and requirements of their customers.
In Economics, there are four (4) main factors of production and these are;
I. Land.
II. Labor (working).
III. Capital resources.
IV. Entrepreneurship.
When these aforementioned factors of production are combined effectively and efficiently, they can be used for the manufacturing or production of goods and services to meet the unending requirements or needs of the consumers.
Basically, there are two (2) types of inefficiency associated with the production of goods and services to meet the unending requirements or needs of consumers, these includes;
1. Technical (productive) inefficiency: it occurs when a company or business firm produce goods and services that consumers do not want. This is typically as a result of the incorrect and inefficient allocation of scarce resources by a business firm or entity.
2. Allocative inefficiency: it occurs when a company or business firm do not maximise output from the given inputs such as raw materials, capital, etc. Thus, it arises when businesses fail to increase the level of their production or productivity from a number of given inputs.
Hence, when a business do not maximise output from the given inputs, it is referred to as an allocative inefficiency.
<em>In conclusion, allocative inefficiency typically occurs when the price of a good or service isn't equal to its marginal cost i.e P ≠ MC.</em>
