Answer:
Read the explanation below
Explanation:
Dollar-cost averaging is based on the belief that prices of stock fluctuate around a normal level. Without this notion, it will not be possible to determine what can be seen as high or low now compared to the future.
The benefits of Dollar Cost Averaging attracts investors to employ. These benefits include:
1. It contributes on a regular basis to portfolios of investment.
2. The problem of market timing is eliminated especially for investors do not have time to track the market regularly or who lack the understanding of the market.
3. The cost basis to consumers on stocks whose values decline are is reduced.
4. It is easy to set up and not expensive especially for investors with no huge amount of money to invest. Like the example in the question, it easier for a salary earner to invest $500 monthly than investing $5,000 in a day.
Despite these advantages, dollar-cost averaging has its own disadvantages, and these include:
1. It has been found out in different studies that investor that can time the market correctly and invest a lump sum amount receive a higher return in the long run than what dollar-cost averaging can fetch.
2. The transaction costs paid by the investors significantly increased because of more number of different transactions when brokerage fee is high.
I wish you the best.
Answer:
The answer is $41.21
Explanation:
Required Rate of Return = Risk Free Rate + Beta*(Market Risk Premium)= 5.2% + 0.9 * 6% = 10.6%
Cost of Equity = D1/Current Stock Price + Growth Rate
10.6% = $3/$40 +g
g = 3.1%
Stock Price After 3 Years = Current Stock Price*Growth Rate= $40 * (1.031)= $41.21
Answer:
The correct answer is letter "A": Generally consists of a company's cumulative net income less any net losses and dividends declared since its inception.
Explanation:
Retained Earnings is the portion of the net earnings of a company that it does not pay as dividends to stakeholders. The corporation retains this money and reinvests it or uses it to pay off a portion of its debt. <em>Retained earnings are calculated by taking the retained earnings at the beginning of the period and adding the current year's net income. Then, net losses are subtracted. The final result represents the retained earnings of the period.</em>
Answer:
The quantity is likely to decrease, the change in price depends on the extent of change in demand and supply.
Explanation:
The fear of the mad cow disease lead to a reduction in the demand for beef. This caused the demand curve to move to the left.
At the same time, destruction of cattle heads ordered by the government lead to a reduction in the supply of beef. This caused the supply curve to move to the left.
This leftward shift in both demand as well as supply curve will lead to a reduction in the equilibrium quantity of beef.
The change in price of beef depends upon the extent of change in demand and supply. If both decrease by the same extent, the price will remain the same.
I think the answer is <span>unit-elastic over this price range. This happens when a company earns the same revenue even with some slight changes on the prices. It means that slight increase or even decrease in price does not affect the revenue of the company.</span>
