Answer:
The answer is 11,3%
Explanation:
The cost of common stock is common stockholders’ required rate of return. There are 3 methods to calculate the cost of common stock:
i- Dividend discount model or DMM
ii- Capital asset pricing model or CAPM
iii- Bond yield plus risk premium approach
Because of the information provided by the exercise, the correct method to use is de Dividend discount model.
Knowing the current market price of a stock and the last dividend paid, we can calculate the required rate of return, which is equal to the cost of common stock.
rs=(D1/P0)+g
D1= expected dividend
P0= current market price of the stock
g= dividend’s growth rate
To calculate D1 you need to use the following formula= D0x(1+g)
<u>Using the exercise information:</u>
D1=D0*(1+g)=1*1,06=1,06
P0=20
g=0,06
rs=(1,06/20)+0,06=0,113*100=11,3%
Answer:
The employee has most likely committed a <u>Horns error</u>.
Explanation:
The horns error occurs when <u>one attribute</u> of an individual (which may be positive or negative), <u>creates a bias that influences how that individual is perceived overall</u>.
<em>If an employee is dissatisfied with his manager's disposition and this dissatisfaction influences the employee to rate the manager low on all performance criteria, then the employee has committed a horns error.</em>
Answer:
Sam: Supply decreased, but demand was perfectly elastic.
Explanation:
Sam is right because the only possible explanation is that the demand is perfectly elastic and the supply decreased. When the price elasticity of demand is perfectly elastic, the demand curve is completely horizontal. Since the price of coffee remained the same, that means that the quantity demanded will decrease only if the supply of coffee decreased.
Answer:
During each phase of the economic cycle of Recession and Expansion, the following economic variables fluctuate, accordingly:
I. Output: During Recession, production output reduces. But, during expansion, product output rises with rising income, employment, and even stable inflation.
II. Employment: During phases of economic Expansion, employment rises, while it contracts during the phases of Recession.
III. Inflation: Due to rising income and output during economic expansionary periods, inflation rate also rises. It reduces when the economy enters a recession.
Explanation:
Business or Economic Cycle describes the recurrent, but not periodic, sequence of changes in the aggregate economic activities of a nation. It usually cascades between the spectrum of expansion and recession. This means that there is an alternation of the phases of economic cycle between expansion and contraction (recession) when the aggregate economic activities may rise or decline due to the equal movement of economic variables like the GDP output, employment, income, and sales.
In this print ad, the source of the advertising message: <u>is the Minnesota State Tourism Department</u>.
<u>Explanation</u>:
Advertising is an activity of producing advertisements to market the goods or services. Businesses involve in advertising to promote the products or services offered by them. Advertising helps people to know about the product and their uses.
Advertising helps in increasing the sales of the product or services. The middleman service can be removed efficiently and salesmanship can be supported. The consumers can be educated easily about the product.
In the above scenario, Minnesota State Tourism Department promotes Minnesota as vacation destination by advertising.
