Answer:
The correct answer is 0.78%.
Explanation:
According to the scenario, the computation of the given data are as follows:
First we calculate the retained earning cost, then
Cost of retained earning = Dividend ÷ Price + Growth
= (1.925 × 70%) ÷ 15 + 6%
= 1.3475 ÷ 15 + 0.06
= 0.1498 or 14.98%
Now, Cost of equity = (Dividend ÷ Price (1 - Flotation cost ) + Growth
= (1.925 × 70% ) ÷ 15 (1 - 0.08) + 0.06
= (1.3475 ÷ 13.8 ) + 0.06
= 0.1576 or 15.76%
So, Exceed amount = 15.76% - 14.98% = 0.78%
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Answer:
D. higher than the equilibrium interest rate.
Explanation:
The Fisher equation at equilibrium ; i = r + τe helps you to answer this question whereby;
i = nominal interest rate
r = real interest rate
τe = expected inflation rate
If we re-write it beginning with real interest rate ; r = i - τe .
So, considering the above equation, if the <em>actual</em> inflation rate turns out to be lower than <em>expected</em> , we will have a lower τe and the difference (i - τe) will be bigger making the real interest rate higher than equilibrium.
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Below are the choices:
A. As HDI increases, so does a nation's level of development.
<span>B. A low HDI usually means that an economy is developed. </span>
<span>C. The HDI varies less in countries below the equator than those above the equator. </span>
D. The HDI is highest in countries with command economies.
<span>According to information about developing and developed countries in the world, sentence A is correct, because most countries with the high level of HDI are the most developed.</span>
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