Answer:
$20.80 and $29.61
Explanation:
The computations are shown below:
Current price is
= Next year dividend ÷ (Required rate of return - growth rate)
where,
Next year dividend is
= $1.20 + $1.20 × 4%
= $1.20 + $0.048
= $1.248
So, the current price is
= $1.248 ÷ (10% - 4%)
= $20.80
Now the price in 10 years is
= Next year dividend ÷ (Required rate of return - growth rate)
where,
Next year dividend is
= $1.20 × 1.04^10
= $1.20 × 1.4802442849
= $1.7762931419
So, the price in 10 years is
= $1.7762931419 ÷ (10% - 4%)
= $29.61
Answer:
Price lining
Explanation:
Price lining is defines as the pricing strategy where related products are sold at different prices to customers.
Usually the price difference depends on the level of quality of the products.
For example a beverage company with different drinks having various flavours will have a different price for each one.
In the given scenario price lining is occurring at a larger scale when Marriott branded its entire family of accommodations based on different value propositions.
These include Ritz-Carlton and JW Marriott for the most discriminating patron, Marriott and Renaissance at the next level of full service, and an array of differentially positioned brands such Courtyard and Residence Inn.
Answer:
The correct word for the blank space is: value chain.
Explanation:
American economist Michael E. Porter (<em>born in 1947</em>) coined the term value chain to denote the interrelated operating activities businesses perform during the process of converting raw materials into finished products. The goal in value chain analysis is to find ways to add value to the product along each part of the process and do so at the lowest possible cost.
Answer:
c) relatively high variable costs
Explanation:
Operating leverage is a ratio that is used to analyze and understand the cost structure of a business. It gives the relation between the variable and fixed cost to the the total cost of running the business.
A business with a large amount of fixed cost relative to variable is said to have a high operating leverage . For such business, operating income would be more volatile because the operating income would not increase in commensurate proportion as sales revenue.
And a company with low operating leverage has low amount of fixed cost relative to variable cost and therefore a relatively high variable costs
Operating leverage is calculated as
Contribution /Earnings before interest and Tax
