Answer:
0.11 or 11%
Explanation:
The computation of the required rate of return is given below:
Required Rate of Return is
= Next Year Dividend ÷ Current Market Price + Growth Rate
= $3.15 ÷ $52.50 + 0.05
= 0.06 + 0.05
= 0.11 or 11%
working note
Given that
Current Market Price = $52.50
As we know that
Growth Rate = Return on Equity × Retained Earning Ratio
Now
Return on Equity = EPS ÷ Book Value of Share
= $5 ÷ 40
= 12.50%
So,
Retained Earning Ratio is
= 1 - Dividend Payout Ratio
= 1 - 0.60
= 0.40
And,
Dividend Payout Ratio = DPS ÷ EPS
= $3 ÷ $5
= 0.60
Now
Growth Rate = 12.50% × 0.40
= 5%
So,
Next Year Dividend = Dividend Recently paid × (1 + growth rate )
= $3 × 1.05
= $3.15
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I the second one is more risky I'm not really that good at business
Answer:
D
Explanation:
A change in quantity supplied is as a result of a change in the price of the good. This change in the price leads to a movement along the supply curve. If price increases, there is an upward movement up along the supply curve and if there is a decrease in price, there is a movement down the demand curve.
A change in supply is caused by other factors other than price. Some of these factors include :
- A change in the number of suppliers
- The cost in the price of raw materials needed in the production of the good.
A change in supply leads to a movement outward or inward
Answer:
D. no control over either the price of pretzels or the wage it pays to its workers.
Explanation:
A competitive market is characterised by many firms that are price takers. Firms that are price takers have no influence over the price they charge for their products; prices are set by the forces of demand and supply.
If the market for pretzels are competitive, the firm cannot set the price for pretzels. If the pretzel stand owner increases the price for pretzels, consumers patronize other pretzel stand owners. There would be no incentive for the pretzel owner to reduce its cost because the pretzel stand owner would be reducing its revenue and reducing its profit
If the market for pretzel makers is competitive, firms have no influence on wages that can be paid to workers.Wages are determined by the forces of demand and supply. If wages are cut, workers move to other firms. There would be no incentive to increase wages because it would increase cost and reduce profit.
