As a shareholder in Titanic Shipping, Inc., James Blue is one of the many actual owners. In case of the bankruptcy of the corporation, his liability would be limited to the amount of his investment.
<h3>What shareholder means?</h3>
- Any individual, business, or organization that has stock in a corporation is a shareholder.
- A shareholder of a firm may own just one share. As residual claimants on a company's profits, shareholders may be subject to capital gains (or losses) and/or dividend payments.
<h3>What is shareholder and example?</h3>
- The definition of a shareholder is a person who owns shares in a company.
- Someone who owns stock in Apple is an example of a shareholder noun.
- A person who owns one or more shares of stock in a joint-stock company or a corporation.
<h3>What is the purpose of a shareholder?</h3>
- The shareholders are the company's owners and give financial support in exchange for prospective dividends paid out over the course of the business.
- There are three ways for an individual or business to become a shareholder in a company by adhering to the company's memorandum at the time of incorporation.
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<span>GDP, or Gross Domestic Product, is typically defined as services, products, goods produced and bought by an national economy in a specific time frame, and is measured comparatively to a time period before. Bitcoin is an example of an underground currency that is not part of the GDP, due to no production of goods or services for the nation and not regulated by government.</span>
Answer:
Cost of Equity =11.56%
Explanation:
The cost of equity can be determined using any of the following methods:
- The Dividend Valuation Model(DVM)
- Capital Asset Pricing Model (CAPM)
The Dividend Valuation Model(DVM) is a technique used to value the worth of an asset.
According to this model, the value of an asset is the sum of the present values of the future cash flows would that arise from the asset discounted at the required rate of return.
Price = D/Kp
D- Dividend payable
Kp- cost of preferred stock
The capital asset pricing model (CAPM): relates the price of a share to the market risk or systematic risk. The systematic risk is that which affects all the all the economic agents, e.g inflation, interest rate e.t.c
This CAPM is considered superior to DVM because it incorporates risk. Hence, we will use the CAPM
Using the CAPM , the expected return on a asset is given as follows:
E(r)= Rf +β(Rm-Rf)
E(r) =? , Rf- 2.90%, Rm-Rf- 7.10% β- 1.22
E(r) = 2.90% + 1.22×(7.10)% = 11.562 %
Cost of Equity =11.56%
Answer:
A perfectly competitive firm will minimize its losses by shutting down when: P < TFC at the profit-maximizing level of output. P < MC at the profit-maximizing level of output.
Explanation:
A firm will choose to implement a production shutdown when the revenue received from the sale of the goods or services produced cannot cover the variable costs of production. In this situation, a firm will lose more money when it produces goods than if it does not produce goods at all. Producing a lower output would only add to the financial losses, so a complete shutdown is required. If a firm decreased production it would still acquire variable costs not covered by revenue as well as fixed costs (costs inevitably incurred). By stopping production the firm only loses the fixed costs.
