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3 years ago

What is the difference between a price floor and a price ceiling?

2 answers:

6 0

Just like in math, floor means to round down (minimum), ceiling means to round up (maximum).

The only one that'd make sense would be the first statement.

AleksandrR [38]3 years ago

3 0

Answer: The answer is A price floor is the minimum price allowed for a good. A price ceiling is the maximum price allowed for a good.

Explanation:

A price floor refers to the minimum price of a good or product. It is a price control which limits the lowest price of a product or service.

A price ceiling refers to the maximum price of a good. It is the price a seller is mandated to charge for a product or service. Government impose price ceiling in order to protect consumers from buying at higher or expensive prices.

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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.

7 0

3 years ago

Which of the following is NOT one of the three factors of production?

miv72 [106K]

The answer is C) communist ideology because all other are the factors of production except this one.

5 0

3 years ago

Read 2 more answers

Magical Productions is a large production company that controls a major portion of the television industry's market share along

Daniel [21]

Answer: Oligopolistic

Explanation:

The oligopolistic industry is one of the type of market structure where the small industries or the companies are compete with each other and earning the various types of economical profits.

The main purpose of this type of industry is that it help[s in reducing the competition in the market and also control the market share function.

According to the given scenario, the magical production is one of the type of large production organization and this company perform various types of functioning in the Oligopolistic industry.

Therefore, Oligopolistic is the correct answer.

3 0

3 years ago

The income and expenses of a corporation for federal income tax purposes are referred to as what type of income?a. nontaxableb.

weeeeeb [17]

Answer:

The correct answer is letter "C": tax.

Explanation:

The Federal Income Tax is collected by the U.S. <em>Internal Revenue Service</em> (<em>IRS</em>) based on the annual earnings of individuals, corporations and all legal entities. It is considered to be the largest source of revenue for the government. In general, they are called taxes.

4 0

3 years ago

Due to a recession in the United States and abroad, ski resorts have suffered from a lack of guests during the peak season. Thes

BlackZzzverrR [31]

Answer:

D) economic.

Explanation:

These are seen to be factors which play vital roles in bringing/affects the competitiveness of the environment of operation of a said firm.

These forces in a business are said to primarily affect the distribution of production activities across the globe and also within a smaller region. These effects of economic forces are easily been felt by the mass/population around the region where these forces are present and also where these enterprises are been sited/located.

Factors ranging from interest rate, employment, inflation rate, government fiscal and monetary policy are generally known to make up these factors been talked about.

5 0

3 years ago