Answer:
Return on equity(r) = 0.16
Plowback ratio(b) = 50 = 0.5
Earnings per share(EPS) = $2
D1 = 50% x $2 = $1
Cost of equity(Ke) = 0.12
Growth rate(g) = b x r
= 0.5 x 0.16
= 0.08 = 8%
Current market price(Po) = D1/Po + g
= $1/0.12 - 0.08
= $25
Market price in 3 years = Po(1+g)n
= $25(1+0.08)3
= $25(1.08)3
= $31.49
Explanation:
In this case, we need to calculate growth rate by multiplying the plowback ratio by return on equity. Then, we will calculate the current market price as shown above. Thereafter, we will subject the current market price to a 3-year growth rate to calculate the market price in 3 year's time
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Answer: (D) Transnational
Explanation:
The transnational strategy is one of the type of global business strategy in which the various types of products and the services are get promoted globally and this type of strategy basically using the personalized approach for promoting the brands and the products in the market by targeting the consumers or audience.
The main advantage of the transnational strategy is to providing the various types of simultaneous function in the multiple countries.
According to the given question, the company using a transnational strategy for the purpose of balancing the efficiency to adjust the local preferences in the various types of other countries.
Therefore, Option (D) is correct answer.
Answer: Option (A) is correct.
Explanation:
When there is an increase in both the components of aggregate demand i.e. government spending and taxes then this will most likely to offset the fiscal policy actions.
If there is an increase in the taxes, as a result aggregate demand decreases because of lower disposable income. This policy action is known as Contractionary fiscal policy.
Whereas, if there is an increase in the Government spending, as a result aggregate demand increases. This policy action is known as Expansionary fiscal policy.
But this will also largely depend upon the tax multiplier and government spending multiplier.
