Answer:
C. All else being equal, the growth rate of the dividends is greater than 2%
Explanation:
The formula to calculate the fair price of a stock with a constant growth in dividends is as follows,
- P = D1 / r-g
- Where D1 is the dividend next period
- r is the required rate of return
- g is the growth rate in dividends
- P = 1.5 / 0.1 - 0.02 = 18.75
- We are taking 1.5 as D1 as it is the dividend per share DeepMind will pay next year.
So, we will be willing to pay more than 18.75 if the fair price per share today is greater than 18.75. We check all the 3 options.
A. say the required rate is 10.1%
- P = 1.5 / (0.101 - 0.02) = 18.52
- So if the required rate of return increases from 10%, the fair price per share is falling and we will be willing to pay less than 18.75 per share.
B. P = 1.2 / (0.1 - 0.02) = 15
- If D1 = 1.2,the fair price per share will be 15 which is less so we will not be willing to pay more than 15 for such share.
C. Say the growth rate in dividends is 2.1%
- P = 1.5 / (0.1 - 0.021) = 18.99
- The fair price per share increased to 18.99 if the growth rate in dividend increases by 0.1 percentage point. Thus, C is the correct answer
I guess the correct answer is $32.14
Zeta Corporation just paid a $2.00 dividend. Analysts believe that Zeta Corporation’s dividend will grow by 20% next year, and then settle into a constant growth regime at 5% per year into the future. If investors assign a required rate of return of 12% to Zeta’s stock, the stock sell for today is $32.14.
The main body of law governing collective bargaining is the National Labor Relations Act (NLRA). It is also referred to as the Wagner Act. It explicitly grants employees the right to collectively bargain and join trade unions. The NLRA was originally enacted by Congress in 1935 under its power to regulate interstate commerce under the Commerce Clause in Article I, Section 8 of the U.S. Constitution. It applies to most private non-agricultural employees and employers engaged in some aspect of interstate commerce. Decisions and regulations of the National Labor Relations Board (NLRB), which was established by the NLRA, greatly supplement and define the provisions of the act.
The NLRA establishes procedures for the selection of a labor organization to represent a unit of employees in collective bargaining. The act prohibits employers from interfering with this selection. The NLRA requires the employer to bargain with the appointed representative of its employees. It does not require either side to agree to a proposal or make concessions but does establish procedural guidelines on good faith bargaining. Proposals which would violate the NLRA or other laws may not be subject to collective bargaining. The NLRA also establishes regulations on what tactics (e.g. strikes, lock-outs, picketing) each side may employ to further their bargaining objectives.
State laws further regulate collective bargaining and make collective agreements enforceable under state law. They may also provide guidelines for those employers and employees not covered by the NLRA, such as agricultural laborers.
Answer: d. the Japanese firm will sell steel at a higher price abroad than at home.
Explanation:
Price elasticity measures the change in quantity demanded resulting from a change in price. The higher the price elasticity, the more the change.
In this scenario, the price elasticity is lower abroad than it is in Japan. The company will therefore charge a higher price abroad because they know that the quantity demanded will not change as much even if they raise prices. This is as opposed to Japan where the quantity demanded will change more if they increase prices.
Answer:
Extended use of the asset.
Explanation:
The major advantages of leasing include operational, financial and tax incentives. When you lease an asset, the entire amount is taken as an expense, which might benefit a company if you compare it to the normal depreciation of a building (which lasts 39 years). Leasing also lowers the amount of foreign investment and it is easier to carry out than purchasing assets.
