Given:
Q0 = 1000 units
Q1 = 1400 units
P0 = $25
P1 = $35
Required:
Price elasticity of Supply =?
Solution:
The price of elasticity of supply is a ratio between the change in quantity demand and the change in pricing. Thus, it can be calculated as:
Price of elasticity of Supply = (Q1-Q0)/((Q1+Q0)/2) ÷ (P1-P0)/((P1+P0)/2)
Subsituting values,
Price of elasticity of Supply = (1400-1000)/((1400+1000)/2) ÷ (35-25)/((35+25)/2)
Price of elasticity of Supply = 1
Answer:
Current Price of the Share Stock is $ 37.86 (D)
Explanation:
Using dividend valuation method with a constant growth rate assumption, share price is calculated as : Po =D1/(Ke-g).
Where; Po ⇒Market Value excluding any dividend currently payable
D1= Do(1+g)⇒Expected dividend in one year's time
Ke =Required rate of return by shareholders
g= Dividend growth rate
<u>Calculation</u>
D1 = 5(1+0.06)= $5.3
Hence, Po= 5.3/(0.20-0.06)
Po=$37.86
The share price is expected to reflect the future expected stream of income i.e dividends and capital gains ,discounted at an appropriate cost of capital.
Some of the assumptions of dividend valuation method include but not limited to the following:
- it assumed that investors act rationality and in the same way ;
-the dividend either show growth or no growth;
-the discount rate used exceeds the dividend growth rate.
Answer:
c. wages and prices are often inflexible in the downward direction
Explanation:
While the prices of the products can decrease in a recession when there is a decrease in demand there is an excess in the supply, therefore, the price decreases but, in real life that doesn't occur people prefer not to work rather than going to work for a lesser amount most of the times. The same goes for some prices under which the producer or manufacture firm does not reduce the price.
Are their any options for the blank space that you could use?
I believe the answer is D. update the records
