Answer:
The correct answer is C
Explanation:
The concept of the invisible hand, is the concept in which the unobservable market force, helps the supply and the demand of the goods to reach at equilibrium in a free market.
As per this concept, the best method for society in order to encourage the jobs creation and the production of products demanded by consumers would be to allow the personal freedom entrepreneurs to follow their self interest.
Answer:
12,497 units
Explanation:
Break even unit = Fixed Cost ÷ Contribution per unit
= $400,000 ÷ $97.00 x 33%
= 12,497 units
Sheryls's business need to sell 12,497 units to break even
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
Answer:
The correct answer is: Retaining a higher percentage of earnings will result in a lower growth rate.; Long-run earnings growth will decrease when firms retain earnings and reinvest them in the business.
Explanation:
In the first statement, a deliberate action is shown that consists of the capitalization of the entity, that is, the equity is accumulated in order to distribute it among the shareholders and leave a part to support the company. In the second statement, it means that the positive results of the company will not be seen in the long term due to management's dispositions to execute a policy to capitalize the entity and improve its cash flow by reinvesting the perceived resources.
Answer:
$6,744.83
Explanation:
We calcualte the present value of a three years annuity discounted at 5.5% considering their cashflow are 2,500
C 2,500.00
time 3
rate 0.055
PV $6,744.8334