Produce goods and services that are not environmentally friendly and increase the affect of manufacturing goods and services
The average nominal risk premium on the long-term government bonds was 2.6 percent.
A risk premium is the expected investment return on an asset that is higher than the risk-free rate of return. The risk premium on an asset is a form of compensation for investors. It compensates investors for tolerating the additional risk in a given investment over that of a risk-free asset. Subtracting the return on risk-free investment from the return on investment yields the risk premium.
The nominal risk premium is:
Nominal Risk-Free Rate - Inflation Premium = Real Risk-Free Rate. Nominal rates are the rates we encounter on a daily basis, such as interest rates from banks and other financial institutions.
Nominal risk premium = 6.1 % -3.5 %
= 2.6%.
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The combination of expansionary monetary policy and a self-regulating economy will cause real GDP will rise to the level above natural real GDP and the recessionary gap would hence turn into an inflationary gap situation.
<h3>What do you mean by monetary policy?</h3>
Monetary Policy refers to the control of the quantity of money available in an economy through which new money is supplied.
The self-regulating economy experiences a recessionary gap. The real GDP is less than the level of natural real GDP. The gap is been corrected by the rightward shift in the short-run aggregate supply curve.
Due to interplay, real GDP will rise to the level above natural real GDP and the recessionary gap turn into an inflationary gap.
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Answer:
$(18,900)
Explanation:
Calculation to determine what the elimination of the West Division would result in an overall company net operating income (loss)
Using this formula
Net operating income (loss) = Net operating income of East division -Allocated common cost to West division
Let plug in the formula
Net operating income (loss)= $ 89,600 - $108,500
Net operating income (loss)= $(18,900)
Therefore the elimination of the West Division would result in an overall company net operating income (loss) of $(18,900)
Answer:
14.06%
Explanation:
The computation of the cost of common equity using the DCF method is shown below:
Cost of Common Equity = [Ending year dividend ÷ Price per share] + growth rate
= [$2.31 ÷ $25.50] + 0.05
= 14.06%
We simply applied the above formula by considering the ending year dividend, price and the growth rate so that the correct percentage could come
