Answer:
D. because it has financial regulations that benefit start-up businesses
Explanation:
In a laissez-faire economy, the government does not interfere with economic activities of such as production, consumption, or private contracts. The government focuses on enforcing law and order, providing public goods, and regulating activities in the country.
Starting a new business in a laissez-faire economy assures an entrepreneur of fair business practices due to government regulations. The business owner will be confident when entering into contracts as the government enforces them.
<span>tests products such as drugs and automobiles for safety</span>
Answer: b. external information search
Explanation: As majority of us are not experts on everything, in the external information search stage if the consumer decision-making process, one researches for products and services that can satisfy our needs and wants. This is the beginning of risk management where we access pros and cons while taking into account past experiences we have had.
External information search occurs when the buyer has no previous knowledge about a product, which then leads them to seek information from personal or public sources or marketer dominated sources especially when the buyer's previous experience is limited inefficient. During the information search, the options available to the buyer are either identified or clarified.
Answer:
Please sew solution below
Explanation:
a. What are the dividend payout ratios for each firm
Dividend payout ratio = Dividend / EPS
• Payout ratio stock A = $1.30 / $2.6 = 0.5= 50%
• Payout ratio stock B = $1.3 / $1.8 = 0.72222 = 72.22%
b. What are the expected dividend growth rates for each stock.
Growth rate = ROE × (1 - dividend payout ratio)
•Growth rate stock A = 0.08 × (1 - 50%) = 0.04 = 4%
• Growth rate stock B = 0.05 × (1 - 72.22%) = 0.01389 = 1.39%
c. What is the proper stock price for each firm
• Stock A
Price = D1 / (Re - g)
D1= $1.30 * (1 + 0.04)
= 1.352
Stock B
Price = D1 / (Re - g)
D1= $1.30 * (1 + 0.013)
= 1.3169
Therefore,
• Stock A's proper price = $1.352 / (0.08 - 0.04) = $33.8
• Stock B's proper price = $1.3169 / ($0.08 - $0.013) = $19.66
