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Bas_tet [7]
3 years ago
8

Two constant growth stocks are in equilibrium, have the same price, and have the same required rate of return. Which of the foll

owing statements is CORRECT?a. The two stocks must have the same dividend per share.b. If one stock has a higher dividend yield, it must also have a lower dividend growth rate.c. The two stocks must have the same dividend yield.d. The two stocks must have the same dividend growth rate.e. If one stock has a higher dividend yield, it must also have a higher dividend growth rate.
Business
1 answer:
Assoli18 [71]3 years ago
7 0

Answer:

B: If one stock has a higher dividend yield, it must also have a lower dividend growth rate

Explanation:

A constant growth stock is valued using the formula:

P0 = \frac{D1}{ke-g}

from this formula,  holding other things constant, a higher D1 value would decrease P0, whilst a lower g value would have an effect of lowering P0.

For the two stocks to be in equilibrium, since we are not specifically  told that the two stocks have the same growth rate [ the question simply says the growth rate is constant...meaning it is not expected to change], it thus follows that if one one stock has a higher dividend value ( which would  increase the price if all other variables are not changed), it must also have a lower dividend growth rate, which would have the opposing effect, thus keeping the two stocks in equilibrium.

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Intel attends recruiting events such as a Hispanic chamber of commerce convention in order to attract diverse applicants. At the
garik1379 [7]

Answer:

resource acquisition

Explanation:

Based on the scenario being described it can be said that the argument for diversity best demonstrated by intel's actions would be resource acquisition. This is when a company focuses on obtaining the right resources needed to accomplish the goals and needs of a project. Which in this case are talented individuals who happen to be minority workers.

5 0
3 years ago
If the demand curve for a life-saving medicine is perfectly inelastic, then a reduction in supply will cause the equilibrium pri
never [62]

Answer:

If the demand curve for a life-saving medicine is perfectly inelastic, then a reduction in supply will cause the equilibrium price to <u>rise and the equilibrium quantity to stay the same</u>.

Explanation:

Perfectly inelastic demand curve indicates the quantity demanded for the life-saving medicine remains the same or does not change in response to a change in price.

Since a part of the law of supply states that the lower the quantity supplied, the higher the price; a reduction in the supply of the life-saving medicine will increase its price.

The combining effect of the two above will lead to an increase in the equilibrium price while the equilibrium quantity will remain the same as it will not respond to the change in price.

The attached graph explains this more clearly. In the graph, the demand curve DD is used to represent the perfectly inelastic demand curve for the life-saving medicine. Therefore, the quantity remains at q no matter the changes, either increase or decrease, in price. Movement from the supply curve S1 to S2 indicates a reduction in supply of the life-saving medicine which causes an increase in the equilibrium price from Po to P1 while the equilibrium quantity stays at q.

This therefore shows that if the demand curve for a life-saving medicine is perfectly inelastic, then a reduction in supply will cause the equilibrium price to <u>rise and the equilibrium quantity to stay the same</u>.

8 0
3 years ago
Which of the following most accurately explains why even if you won $1 million in a lottery, you still would not escape the scar
liubo4ka [24]

Answer:

All Individuals, whether rich or poor,are dissatisfied with their material well-being and would like more.

Explanation:

Individuals wanting more and not being satisfied with their material well being goes back to the fundamental problem of economics-unlimited human wants. Economists argue that human wants are unlimited and insatiable irrespective of their economic class. Whether rich or poor, no man is satisfied with his material well-being. Every man still feel something is lacking after acquiring so much or so little. He still has the scarcity problem.

This never-ending desire is embedded in the physiological make up of a man. When a man gets food, then he wants house. When he gets house, he wants car. When he gets a car, he wants to buy a private jet. In short, the more he gets, the more he wants more.

And that`s is the reason why you would win $1 million and stills not satisfied with having enough. You would still believe you lack something. You would still want to acquire more just to solve this scarcity problem.

Other options do not explain the problem ; they just points at microeconomics and macroeconomics issues.

5 0
3 years ago
Consider Derek's budget information: materials to be used totals $65,100; direct labor totals $198,700; factory overhead totals
egoroff_w [7]

Answer:

cost of goods manufactured= $653,500

Explanation:

Giving the following information:

Consider Derek's budget information: materials to be used totals $65,100; direct labor totals $198,700; factory overhead totals $393,700; work in process inventory January 1, $188,500; and work in progress inventory on December 31, $192,500.

cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP

cost of goods manufactured= 188,500 + 65,100 + 198,700 + 393,700 - 192,500= $653,500

5 0
3 years ago
An organization owned by stockholders that accepts deposits, processes payments, and
Oxana [17]

Answer:

A Bank

Explanation:

8 0
2 years ago
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