Not very, most of the time CO’s are underpaid so they can have mass amounts of them.
In a free-market economy, a product that entails a negative externality (additional social cost) will be underproduced. A free-market economy is when the government has little or no restrictions and regulations on buyers and sellers in the market. They are essentially 'free' of all control and can base their inputs and outputs off of supply and demand. If there is a negative externality, then there too few items being produced in the economy.
The relevant opportunity costs for you and your friend for allocating four hours to attending the concert are<u> "watching a sporting event on TV for you and studying for your friend.
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An opportunity cost is characterized as the estimation of a forgone action or elective when another thing or action is picked. Opportunity cost becomes possibly the most important factor in any choice that includes a tradeoff between at least two alternatives. It is communicated as the relative cost of one option as far as the next best option.
The expected share price after the third dividend is GH¢ 20.22
What is stock price?
The stock price can be determined as the present value of future dividends, years 1-3 and the present value of all dividends beyond year 3 which is known as the terminal value(i.e. the unknown selling price after the third dividend as required in this case)
The terminal value is the present value of future dividends after 3 years which needs to be discounted 3 years backward in the process of computing share price
Share price=12
Year 1 dividend=1
Year 2 dividend=2
Year 3 dividend=3
Terminal value=unknown (assume it is X)
discount rate=32%
Each future dividend can be discounted using the present value formula of a single cash flow shown below:
PV=FV/(1+r)^N
FV=each future cash flow/dividends
r=discount rate=32%
N=the year of dividends, 1 for year 1, 2 for year 2
12=1/(1+32%)^1+2/(1+32%)^2+3/(1+32%)^3+X/(1+32%)^3
12=3.20978378829618+X/(1+32%)^3
12-3.20978378829618=X/(1+32%)^3
(12-3.20978378829618)*(1+32%)^3=X
X=(12-3.20978378829618)*(1+32%)^3
X=GH¢ 20.22
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