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3 years ago

Consumer sovereignty means that legislation now protects the rights of consumers to dispose of their incomes as they see fit.

Business

1 answer:

Gelneren [198K]3 years ago

3 0

Answer:

The correct answer is B false.

Explanation:

Consumer sovereignty mean consumers are the final authority to determine which goods are the most suitable to fulfill their needs and that is the reason why their decisions, preferences and habits should be the starting point of any new invention. Means the holder of scarce resource has to produce those products that customers wants to satisfy their need. The power of consumer spending is the best judge of what to produce.

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Suppose Stark Ltd. just issued a dividend of $2.24 per share on its common stock. The company paid dividends of $1.80, $1.98, $2

Sergeu [11.5K]

Answer:

Ans, The cost of the company’s cost of equity capital using the arithmetic average growth rate is 10.63% and using the geometric average of the growth rate is 10.60%

Explanation:

Hi, this is the equation we need to solve in order to find the company’s cost of equity capital.

$r=\frac{Dividend}{Price} +g$

As you can see, we almost have everything, the only problem here is "g", its growth rate, so let´s find "g" using the arithmetic average, but first, we need to find the growth rate for every period, the formula is

$g=\frac{(FinalDividend-PastDividend}{PastDividend}$

Therefore, we need to find 4 g´s, let´s call them g1, g2, g3 and g4:

$g1=\frac{(1.98-1.80)}{1.80} =0.10$

$g2=\frac{(2.05-1.98)}{1.98} =0.0354$

$g3=\frac{(2.16-2.05)}{2.05} =0.0537$

$g4=\frac{(2.24-2.16)}{2.16} =0.0370$

So the average is:

$Average(g)=\frac{0.10+0.0354+0.0537+0.0370}{4} =0.0565$

Therefore, the average growth rate is 5.65%

And the company’s cost of equity is:

$r=\frac{2.24}{45} +0.0565=0.1063$

so, if the average growth rate is found by using the arithmetic average is 10.63%.

Now, let´s find the geometric average

$g(average)=\sqrt[4]{(1+0.10)(1+0.0354)(1+0.0537)(1+0.0370)} -1=0.0562$

therefore, using the geometric average to find the growth rate, the company’s cost of equity is:

$r=\frac{2.24}{45} +0.0562=0.1060$

using the geometric average, the company’s cost of equity is 10.60%

Best of luck.

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3 years ago

A purse company's ads feature the members of a popular housewives reality show. product sales increase significantly among the

Serjik [45]

The housewives reality show from the fans’ viewpoint is an example of reference group. The reference group is a type of group or could be an individual in which this is being compared to another party in which the reality show is being compared as each members are shown and ranked according to their popularity.

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3 years ago

Suppose that Larry, an economist from a business school in Georgia, and Megan, an economist from a nonprofit organization on the

iVinArrow [24]

Where is the dialogue? :)

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3 years ago

There is a need to develop theories about what kind of fraud has occurred.

Mashcka [7]

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3 years ago

Which of the following schools is least likely to receive state tax dollars? A. Liberty Baptist University

bagirrra123 [75]

The least likely to receive tax dollars is Liberty Baptist University because of its religious beliefs.

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3 years ago