The amount Louis just paid is considered to be the price.
What a price means or what it communicates to customers is called?
- A price's significance or the message it sends to clients are referred to as Interpretation.
- The extent to which a customer's pleasure with the product after the purchase and with the purchasing experience is enhanced by the price of a product is part of their Response.
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Answer:
The advantages of starting own business:
- Flexibility: a person who starts his own business does not necessarily have to work 9/5 monday-friday, he can set his own schedule. Needless to say, many business owners work longer hours than regular employees, but the do so because of the hope to earn more money from profits than from a regular wage.
- The possibility of profit: an employee in a legal firm will not be able to obtain any dividends (unless he owns stock), while the very definition of a business owner is someone who obtains profits.
- Fulfillment: it is probably more fulfilling to see your own business develop and grow than go to work everyday for someone else's company.
Some disdavantages are:
- Risk: starting a business is risky. The business might result in losses instead of profits, in other words, the business may fail.
- Capital needs: to start a business, you need some capital, and it is not always easy to obtain. Most business owners either get debts, or liquidate some of their own assets (house, car, etc) to finance the company.
- Longer work hours: as stated above, it's very likely that a business owner will have to work night and day, especially during the first stages.
Answer:
There is no correct answer is these options. But the correct answer is $113.41
Explanation:
The formula to solve this is:
Po = D1/r - g
Po is the Current price of the common stock
D1 is the future dividend payment
r is the rate of return
g is the growth rate.
This is quite different from the usual(single stage). This is Two-stage Dividend Discount Model. To solve this;
D1(Dividend in year 1) is $3.15( $2.42 x 1.3)
D2(Dividend in year 2) is $3.78(3.15 x 1.2)
D3(Dividend in year 3) is $4.15($3.78 x 1.1)
D in subsequent years is $4.36(4.15 x 1.05)
P3(price of stock in year 3) = $4.36/0.083 - 0.05
=$132.12
Now the stock's current market value is
$3.15/1.08 + $3.78/1.08^2 + $4.15/1.08^3 + $132.12^3
The price of the stock is $113.41
