$51.22 is intrinsic value of this stock.
<h3>Intrinsic value of this stock</h3>
For computing the intrinsic value, first we have to determine the current year dividend and expected rate of return which is shown below:
The computation of the next year dividend is shown below:
= $3 + $3 × 3.8%
= $3 + 0.114
= $3.114
And, the expected rate of return would be
= Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)
= 2.4% + 0.88 × (10.9% - 2.4%)
= 2.4% + 0.88 × 8.5%
= 2.4% + 7.48%
= 9.88%
Now the intrinsic value would be
= Next year dividend ÷ (Required rate of return - growth rate)
= $3.114 ÷ (9.88% - 3.8%)
= $3.114 ÷ 6.08%
= $51.22
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Answer:
Robert F Williams
Explanation:
He was born in Monroe, North Carolina. He was elected as the local branch president of the NAACP. He was the father of the Black Power movement and civil rights leader who openly advocated armed self-defense for blacks in the 1960s. He inspired the Student National Coordinating Committee, The Revolutionary Action, and The Black Panther Party.
Answer:
Quantity demanded of matches will remain unchanged, Quantity demanded of tomatoes will rise
Explanation:
Law of demand states that there is an inverse relationship between price of a good and it's quantity demanded, keeping other factors affecting demand as constant.
Price elasticity of demand refers to degree of responsiveness of quantity demanded of a good with respect to a change in it's price.
In the given case, price elasticity of demand for matches is inelastic since requirement of matches is fixed and consumer won't buy additional matches if the price is reduced. Thus a price decease will not increase the quantity demanded of matches.
On the other hand, tomatoes have various uses and thus, their demand is elastic. So if price of tomatoes drops, the quantity demanded of tomatoes would rise, keeping other factors affecting demand as constant.
True customers come first.
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