Answer:
The dividend growth rate is 8%.
Explanation:
Considering the stock is the one that has a constant dividend growth, we use the DDM approach for constant growth model. The constant growth model formula for price of a stock today is,
P0 = D1 / r - g
Where,
- D1 is the dividend in the next period or D0 * (1 + g)
- r is the required rate of return
- g is the growth rate in dividends
Plugging in the available value,
30 = 1.25 ( 1+g) / (0.125 - g)
30 * (0.125 - g) = 1.25 + 1.25g
3.75 - 30g = 1.25 + 1.25g
3.75 - 1.25 = 30g + 1.25g
2.5 / 31.25 = g
g = 0.08 or 8%
<span>The price level would be lower than would otherwise have occurred.
Since the economy is a inflation gap </span><span>input prices will eventually increase in the
absence of any fiscal policy, causing the price level to rise and output to fall back to potential
output. The contractionary fiscal policy will reduce aggregate demand and lower output to
potential output while at the same time lowering the price level. Thus the only difference
<span>between the two is a lower price level with the contractionary fiscal policy.</span></span>
Select the items that describe what most likely happens when the Federal Reserve increases the money supply (and people are confident in the economy).
Consumption increases and interest rates fall.
If there is more money in the economy, then there is an increase in the money supplied and consumed. Due to more being available to 'claim' more people are working and buying items they may not have otherwise and the interest rates start to fall because people aren't borrowing as much.
Answer:
$47,000
Explanation:
Cedar Grove Industries CVP Income Statement for Month Ending May, 2017
Total Per Unit
Sales ($49×7,600) $372,400 49
Less Variable Cost
($28×7,300) $204,400 28
Contribution Margin $168,000 21
Less Fixed Cost$121,000
Net Income (loss)$47,000
Answer:
Design competition
Explanation:
Competition is said to occur when there is rivalry between business organisations that offers the same product and services. This results in struggle for profit, market share growth as well as revenue achievement.
Design competition is employed by the organization who wants to have a cutting edge advantage over rival companies that produces the same product. This dine by changing production line, technology, product size and quality e.t.c.
However, various barriers hinders Design competition. For instance, large investment in old technology will make decisions to take up new technology a hard one to take.
