Answer:
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Answer:
The answer is: B) Price ceilings generate shortages. Consequently, the consumers who obtain the product at a lower price win, but other consumers will lose because they would like to purchase the product but are unable to because of a shortage.
Explanation:
A price ceiling generates shortage because it doesn´t allow an equilibrium point to be reached where demand will equal supply. As the price is artificially set down, there is more demand for the product than what is supplied. That is the result of suppliers not willing or being able to supply enough product due to its low price.
Answer: (a) FOOD AND DRUG ADMINISTRATION (FDA)
Food and Drug Administration (FDA) is a federal agency of the USA that protects and promotes public health. It also looks over food safety, drug safety, etc. various laws are included in FDA such as Public Health Service Act, Federal Anti-Tampering Act, etc.
Closing costs are fees paid at closing by either party who are buying a house.
Answer:
(a) 12.95%
(b) 6.70%
Explanation:
(a)
Risk free rate = 5.30%
Risk Premium = 5.10%
Beta = 1.50
Cost of Equity is calculated below using CAPM formula:
Expected rate of return:
= Risk free rate + Risk Premium × Beta
= 5.30% + 5.10% × 1.50
= 5.30% + 7.65%
= 12.95%
Hence, Cost of equity for company stock is 12.95%.
(b) Value of stock = Expected dividend ÷ (cost of equity - Growth rate)
$32 = $2 ÷ (12.95% - Growth rate)
(12.95% - Growth rate) = $2 ÷ $32
Growth rate = 12.95% - 6.25%
= 6.70%
Hence, the growth rate in dividend is 6.70%.
