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Tasya [4]
2 years ago
6

A share of stock sells for $53 today. The beta of the stock is .7 and the expected return on the market is 16 percent. The stock

is expected to pay a dividend of $1.00 in one year. If the risk-free rate is 5.2 percent, what should the share price be in one year?
Business
1 answer:
zimovet [89]2 years ago
5 0

Answerueueyehrgrgr

Explanation:

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suppose the absolute values of the intercept and slope of the demand function are approximated to be 10 and 3 respectively. if t
egoroff_w [7]

The equilibrium price is $0.5 while the equilibrium quantity is 8.5

From the Demand data that we have in this question,

Slope = 3

Intercept = 10

The demand equation

D = -3p + 10

D = 10 - 3p

The supply data

Slope = 5

Intercept  = 6

Supply equation

S = 6 + 5p

D = S

This is because at equilibrium, <u>supply = demand</u>

Therefore,

10-3P = 6+5P

collect like terms

10-6 = 3p+5p

4 = 8p

Divide through by 8

p =\frac{4}{8} \\\\= \frac{1}{2}

Equilibrium price = $0.5

The equilibrium quantity

D = 10 - 3*0.5

= 10-1.5

= 8.5

Therefore from the calculation, the equilibrium price is $0.5 and the equilibrium quantity is 8.5

Read more on brainly.com/question/16689858?referrer=searchResults

3 0
2 years ago
If a perfectly competitive firm can sell a bushel of soybeans for $25 and it has an average variable cost of $26 per bushel and
Elodia [21]

Answer:

Explanation:

The firm Should decrease the output.

Because as we see selling price P is LESS than Marginal Cost (MC) and in perfect competition P=MC for efficient allocation . So By decreasing output firm can decrease MC ⇒ which leads to output where P=MC.

3 0
2 years ago
a type of bank account used by a person who wants to safely store their money over a long period of time, earning interest durin
Phoenix [80]

savings account

your welcome

4 0
3 years ago
Which of the following is not a function of prices in a market system? Group of answer choices Prices send signals to buyers and
Sedaia [141]

Answer:

Prices ensure an equal distribution of goods and services among consumers.

Explanation:

The price mechanism helps in the efficient allocation of resources. There are a number of functions performed by the price mechanism. Prices send signals regarding resources. An increase and decrease in prices reflect surplus and deficit.  

Price balances the demand and supply of a product. Price is inversely related to demand and positively related to the supply of a product. It is determined by the interaction of demand and supply and helps in balancing supply and demand.  

For instance, an increase in demand would increase the price, this higher price will motivate the suppliers to increase quantity supplied thus balancing demand and supply.  

Price helps in coordinating economic activities and helps buyers and sellers in decision making. However, they do not help in equal distribution of goods and services among consumers.

6 0
2 years ago
Suppose you examine the central bank’s balance sheet and observe that since the previous day, reserves had fallen by $100 millio
aksik [14]

Answer:

The Central Bank is trying to increase money supply.

Explanation:

When the Central Bank makes moves to increase reserves, it means that it is simply trying to mop up excess cash from the economy to fight inflation. Spiking inflation means that the power of a currency is gradually being eroded. The Central Bank cannot allow this to happen so it hits the "Reduce Money In Circulation" button. It does this by reviewing upwards, the money reserves which commercial banks must hold with the Central Bank.  

It can also increase the rate at which it lends to the Commercial Banks and Investment houses. Commercial Banks, in turn, transfer the additional cost of borrowing to businesses who will seek loans. This slows down the rate at which money is pumped into the economy.

In the question, however, we notice that the Central Bank has enervated its reserves. This means that it is pumping more money into the economy. This economic move may have been executed to prevent the economy from slipping into a recession or simply to stimulate the economy.

In the short run, increased money supply means, businesses have more access to funds from commercial banks. More funds mean, more investment. Increased investment spending means the businesses will need to expand operations, hire more staff, and the multiplier effect goes on and on.

Cheers!

6 0
2 years ago
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