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Answer:
a. 0.8
Explanation:
In economics the MPC is the marginal propensity to consume. This percentage is usually multiplied by the disposable income to figure out how much money people in an economy will spend.
This can be worked out as under:
rakhivasavada :
Required Rate of Return r(m) = r(f) + b r(p), where r(f) is the risk free rate and the r(p) is the risk premium and b is beta and therefore:
r(m) = 3.00 + 1.20 * 5.5 = 9.6%.
rakhivasavada :
Hence current price P(0),
= D1/(1+k) +D2/(1+k)^2 + D3/(1+k)^3 + D4/(1+k)^4 + P4/(1+k)^4
D1 = D0 * 1.25 = 1.25*1.25 = 1.25^2
D2 = 1.25D1 = 1.25^3
D3 = 1.25D2 = 1.25^4
D4 = 1.25D3 = 1.25^5
D5 = 1*D4 = 1.25^5 (g = 0, so (1+g) =1)
P4 = D5/k = 1.25^5/0.096
So, P(0)
= 1.25^2/1.096 +1.25^3/1.096^2 +1.25^4/1.096^3 +1.25^5/1.096^4 +1.25^5/(0.096*1.096^4)
= 29.05
rakhivasavada :
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rakhivasavada :
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<h3>What do you mean by a product?</h3>
A product refers to the item offered for sale. It can be any item or service.
Amazon and Expedia are best described as E-Tailers that sell products and services directly to final buyers via the internet.
Learn more about the product here:
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