Answer:
$81.88
Explanation:
We need to first calculate the terminal value which is the value in perpetuity for this preferred stock as shown below:
terminal value of the dividend =dividend/required rate of return
dividend is $5.65
required rate of return is 3.99%
terminal value of dividend=$5.65/3.99%=$ 141.60
The preferred stock price is the present value of the dividend's terminal value value
Present value=terminal value/(1+r)^n
r is the rate of return of 3.99%
n is the of years involved which is 14,15 years from today means the end of the 14th year
present value=$141.60/(1+3.99%)^14=$81.88
Answer:
a. $137,020
Explanation:
The computation of the total variable cost for 5,200 activity level is shown below:
But before that first we have to find out the variable cost per unit which is
= Total variable cost ÷ given activity level
= $131,750 ÷ 5,000 units
= $26.35
Now the variable cost is
= Variable cost per unit × expected activity level
= $26.35 × 5,200 units
= $137,020
We simply applied the above formulas
Answer:
(A) Increasing output until the marginal cost equals the new price
Explanation:
Profit is maximized when marginal profit is zero, which is to say when the revenue from the sale of the next item is equal to its cost of production.
If the price is set higher by the marketplace, then increasing the volume of units produced will increase profit, up to the point where marginal cost is equal to the market price.
The correct answer is: "I would recommend her not to increase the price, because with an elastic demand function this will cause a great decrease in the quantity demanded by consumers".
The demand function represents the quantity of a certain good or service that consumers are willing to purchase in the market at different price levels. The law of demand states that there is an inverse relationship between price and quantity demanded (ceteris paribus, hence, given that the rest remains equal). <u>Therefore, when the price charged decreases, the amount that consumers are willing to purchase increases. </u>
In turn, the elasticity of the demand function measures the sensitiveness of the quantity demanded by consumers when there is a certain price change. If the demand function is elastic it means that a price variation would generate an even larger variation (in the inverse direction of course!) in the quantity demanded. <u>This is the case of the lemonade stand therefore the girl should not increase prices because this will not help her to reach her objective quicke</u>r, as she would loss a greater proportion of units sold than the size of the price increase that would have allowed her to earn more per unit.
Answer:
Lila: laissez-faire Jacob: autocratic Hannah: bureaucratic
Explanation:
Lila lets her team do their part and does not intervene.
Jacob wants complete control and would rather make all decisions, giving his employees no say.
Hannah considers all employee decisions, but makes the final choice.