Answer:
<u>Question 1:</u>
What would be the stock price in five years if the P/E ratio remained unchanged?
Answer: $161.30
<u>Question 2:</u>
What would the price be if the P/E ratio increased to 18 in five years?
Answer: $175.96
Explanation:
Question 1:
<u>What would be the stock price in five years if the P/E ratio remained unchanged?</u>
Solution:
PV = $6.07
I = 10%
PMT = 0
N = 5
CPT FV = PV×(1+1/Y)^N
CPT FV = $6.07 × (1+0.10)^5
CPT FV = $9.78
Stock price in five years = $9.78×16.5 = $161.30 (answer)
<u>Question 2:</u>
<u>What would the price be if the P/E ratio increased to 18 in five years?</u>
CPT FV = $9.78
Price = CPT FV × 18
Price = $9.78 × 18
Price = $175.96 (answer)
Answer:
related to the demand for the product or service labor is producing.
Explanation:
Factors of production can be defined as the fundamental building blocks used by individuals or business firms for the manufacturing of finished goods and services in order to meet the unending needs and requirements of their customers.
In Economics, there are four (4) main factors of production and these are;
I. Land.
II. Labor (working).
III. Capital resources.
IV. Entrepreneurship.
Labor refers to the human capital or workers who are saddled with the responsibility of overseeing and managing all the aspects of production.
Generally, when these aforementioned factors of production are combined effectively and efficiently, they can be used for the manufacturing or production of goods and services to meet the unending requirements or needs of the consumers.
Typically, when economists say that the demand for labor is a derived demand, what they do really mean is that, this demand for labor is related to the demand by the consumers for the product or service labor is producing.
Answer:
- researchers tend to treat the problem as if it were in their home environment
- researchers underestimate the influence of local culture on a problem
Explanation:
Both economic and cultural differences between countries can affect greatly a market research process, and they must be addressed before the research starts.
For example, the names of many western products do not sound or mean good things in Chinese and in order to perform a good market research the name must be adapted before starting the research process. Coca Cola had to change its name before any research could be done because it sounded like toad wax (whatever that is in Chinese) and ended up with Kekou Kele which means "let your mouth rejoice". If the researchers had tried to ask anyone about their toad wax tastes it probably would have resulted in a very short and negative survey.
Answer:
4.87%
Explanation:
In this question , we are asked to calculate the appropriate after-tax cost of new debt for the firm to use in capital budgeting analysis.
PMT = 1000*7% = 70 (indicates the amount of interest payment)
Nper = 10 (indicates the period over which interest payments are made)
PV = 966 (indicates the present value)
FV = 1000 (indicates the future/face value)
Rate = ? (indicates the cost of debt)
After Tax Cost of Debt = Rate(Nper,PMT,PV,FV)*(1-Tax Rate) = Rate(10,70,-966,1000)*(1-.35) = 4.87%