Answer:
the estimation of the cost of equity is 7.4%
Explanation:
The computation of the estimation of the cost of equity is shown below:
Here we used the Capital Asset Pricing model formula i.e.
Cost of equity = Risk free rate + Beta × market risk premium
= 6% + 0.20 × 7%
= 6% + 1.4%
= 7.4%
Hence, the estimation of the cost of equity is 7.4%
We simply applied the above formula so that the correct value could come
And, the same is to be considered
Answer:
The answer is: D) All of the above are correct.
Explanation:
Theoretically in a market economy, the supply and demand of goods should play a critical role in the allocation of resources. One basic rule in economy is that resources are scarce, and the demand and supply helps us obtain the maximum benefit from our scarce resources.
The supply and demand should tell us how much of a good or service should be produced to reach an equilibrium point were both suppliers and consumers are satisfied.
A true market economy should not be affected by external events and policies but in the real world governments exist and markets are regulated, some more than others. The supply and demand curve should help us predict how those external events will affect the economy.
In a pure competition market, all products that being sold in that market is EXACTLY the same. None is worse and none is better.
In that condition, Buyers will make their decision based on price ( since all product's quality is possible)
That's why producers should sell where p=MC, which mean they should sell in the lowest price possible to be able to compete with other competitors
The climograph is a device that gives information about two basic climatic parameters, monthly average temperature and precipitation. It is a graphical representation and <span>does not provide complete information about the climate. From the given statements about the climograph the following is true:
</span><span>A climograph can be used to classify climate. </span>
