An increase in the riskiness of corporate bonds will ________ the yield on corporate bonds and ________ the yield on treasury securities, everything else held constant.

Answers

Answer 1

The answers are - increase and reduce.

Corporate bonds deliver higher yields than some different fixed-income investment options, but for a price in terms of counted risk. Most corporate bonds are debentures, indicating they are not assured by a collateral. Investors in such bonds must handle not only interest rate risk but also credit risk, the possibility that the corporate issuer will default on its obligation.

Therefore, it is important that corporate bond investors know how to assess credit risk and its potential returns. And while increasing interest rate activities can decrease the value of your bond investment, a default can practically destroy it. Holders of defaulted bonds can recover some of their principal, but it's often pennies on the dollar. The preliminary risks related to corporate bonds are credit risk, interest rate risk, and market risk. In addition, some corporate bonds may be called for redemption by the issuer, and their principal payment may be made before the maturity date.

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Answer 2

An increase in the riskiness of corporate bonds will increase the yield on corporate bonds and reduce the yield on treasury securities, everything else held constant.

Compared to certain other fixed-income investment options, corporate bonds offer higher returns, but at a cost in terms of added risk. The majority of corporate bonds are debentures, which means they are not guaranteed by any kind of asset. Investors in these bonds must manage both interest rate risk and credit risk, or the chance that the business issuer will stop making payments on the bond.

Investors in corporate bonds should therefore understand how to evaluate credit risk and its possible rewards. Additionally, while actions to raise interest rates may reduce the value of your bond investment, a default may almost wipe it out. Bondholders can recoup part of their capital, although it's typically only pennies on the dollar. Credit risk, interest rate risk, and market risk are the initial concerns associated with corporate bonds. Additionally, the issuer may call for the redemption of some corporate bonds, and the principal may be paid before the bonds' maturity date.

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Related Questions

Does the U.S. have a trade deficit or surplus?

Answers

Answer:

surplus

Explanation:Don't quote me on this because I might be wrong, but I think the united states has a trade surplus because of the dependence on U.S trade globally. China has a trade surplus because they have some the biggest and busiest factories and shipping outposts. Since the U.S has such a high trade level with the trade Surplus of china the U.S is also a trade surplus.

QUESTION 7 of 10: Which is NOT a use for market research?
a) Identifying what services customers want
Ob) Deciding what merchandise to sell
O c) Determining tax deductions
O d) Forecasting sales
Submit

Answers

Answer:

The answer would be b, determining tax deductions

Explanation:

All three of the other points are ways you can find out customers needs and wants, however tax deduction is used to figure out how much tax is owed.

If the economy is experiencing an inflationary gap, the Fed should conduct ______ monetary policy to ______ aggregate demand.

Answers

The answer is Contractionary and Decrease

Which type of product advertisement can be used to sell a company’s product when two or more other companies are selling the same product?

Answers

Answer:competitive advertising

Explanation:

I’m not for sure but I think that might be the answer

Answer: competitive advertising

Explanation:

if on online course it is what was right

Select two learning styles from the following list. Describe ways in which each of the two learning styles prefer to learn. Bodily/kinesthetic, interpersonal, intrapersonal, logical/mathematical, naturalistic, rhythmic/musical, verbal/linguistic.

Answers

Answer:

interpersonal

positive behaviors used when interacting with others

intrapersonal

relationship with self

Explanation:

I really don't have an explanation sorry

At what point does an idea-driven enterprise run into problems and At what point does a market-driven enterprise run into problems?

Answers

Idea-driven businesses face unique challenges during growth. ... Their innovation is born from a deep desire to change the way people think about ... to shed light on the different stages of idea-driven business and what problems each stage ...

Idea-driven firms confront particular difficulties as they expand. Their creativity is the result of a strong desire to alter how people think, to shine a light on the many stages of the idea-driven company, and the issues that each level faces.

What is firm?

A firm is a for-profit business entity that offers professional services, such as a corporation, limited liability company (LLC), or partnership. Most businesses only have one location. On the other hand, a business company is made up of one or more physical locations that are all owned by the same person and have the same EIN (EIN).

The term "firm," when used in a title, is frequently connected to companies that offer expert legal and accounting services, but it may also refer to a wide range of companies, including consulting, marketing, and graphic design firms, among others.

The name of the company is often used for commercial purposes, but the level of legal protection—for owners or employees—depends on the ownership structure that was used to establish the company. Corporations, for example, offer a higher level of legal protection than other forms of organizations. The idea of a mature company with a strong foundation already exists.

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Answer the question on the basis of the following table that illustrates the multiplier process. Change in income Change in consumption Change in saving
Assumed increase in investment $20 $_____ $4.00
Second Round $_____ $12.80 $_____
All Other Rounds $_____ $36.00 $______
Totals $_____ $_____ $20.00
Refer to the given table. The change in income in round two will be: A) $16. B) $4. C) $20. D) $24.

Answers

Change in savings is the highest in the economy. The change in the income in round two will be $16.

What is saving?

Savings are unused funds or postponed spending. One way to save is to place money aside in a pension or deposit account, for instance. Reducing expenses, such as recurrent fees, is a part of saving as well. In terms of personal finance, saving typically refers to the low-risk preservation of money, such as in a deposit account, as opposed to investing, where the risk is significantly larger. In terms of economics more broadly speaking, saving refers to any income not used for immediate consumption. Savings refers to a stock variable, which is something that exists at any given time, as opposed to savings, which refers to an action occurring over time. Personal interest payments, however, are not considered to be "saving" in the sense that word is used in the United States unless the institutions and individuals who receive them do so.

Change in income= 2*8=$16

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A graphical representation of how much a seller would be willing and able to bring to the market at various prices is known as the:

Answers

A graphical representation of how much a seller would be willing and able to bring to the market at various prices is known as the supply curve. The supply curve is one of the most important tools used by economists to study markets.

It is a visual representation of the relationship between the price of a good or service and the quantity that producers are willing and able to supply at that price. The supply curve slopes upward from left to right, indicating that as the price of a good or service increases, producers are willing to supply more of it.

The reason for this is simple as the price of a good or service increases, producers are more likely to invest in the resources necessary to produce it, and they are also more likely to allocate their resources towards producing it.

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In the context of incentive systems, __________ reward employees for increasing productivity or saving money in areas under their direct control.

Answers

In the context of incentive systems, gainsharing plans reward employees for increasing productivity or saving money in areas under their direct control.

Gainsharing is described as a system of management in which the organization seeks  higher levels of performance with the help of  the involvement and participation of its people.

As performance  is improved, employees share financially in the gain. It is  combinely a team approach in which all the employees at a site or operation are included generally.

Gains and the given payouts are self-fund based on savings which are generated by employees by improved performance.

Gainsharing commonly applies to a single site, or it can be stand-alone organization.

Employees are often involved with the design process of the organization.

A great supporting employee involvement system is a part of the plan in order to drive improvement initiatives.

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Is a travel agent a part of the primary, secondary or tertiary sector?

Answers

a travel agent is a secondary sector

For Tesla, the Model S represents a
(BCG) market growth/market share matrix.
on the Boston Consulting Group

Answers

The answer is "star" and its further explanation can be defined as follows:

The Tesla Model S is pleasant during the day, but fitness and finish are something to want. When heading for just a quick ring all-around city or heading off to the other side, Model S 2020 is full of space and luxury. It is a quality rating of 7 out of 10.The Tesla Model S is the top U.S. car with an overall score of 70 in the ultra-luxury car category. The top-range model S is 373 miles long and has one of today's largest ranges. For Tesla, Model S is a star in the growth/market share matrix of the Boston Consulting Group. The hunting for a high-quality premium car, Tesla Model S.Its overall design is maybe 10-years old, but the type S still sets a baseline for all EVs, and it has an unmatched driving range. The Model S is rather costly at $80,000 on the other hand.

That's why the correct answer is "star".

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in year 1, manufacturing costs as a percentage of sales are assumed to have a pert distribution with a minimum value of 65 percent, a maximum value of 90 percent, and a most likely value of 80 percent. thereafter it is assumed that manufacturing cost will be the same percentage of sales as year 1. fixed cash cost (rent) is expected to be $100,000 in the first year. however, the fixed cash cost is expected to grow at the expected inflation rate at 4 percent a year

Answers

The expected fixed cash cost (rent) in Year 1 is $100,000. This amount is expected to grow at a rate of 4% per year due to inflation. Thus, the fixed cash cost (rent) in Year 2 is expected to be $104,000. This trend is expected to continue in subsequent years.

The fixed cash cost for the second year can be calculated as follows:  

Fixed Cash Cost for Second Year = $100,000 x (1+ 4%) = $104,000.

In economics, inflation refers to a well-known growth in the expenses of goods and services in an economic system. whilst the general fee stage rises, every unit of forex buys fewer goods and offerings; consequently, inflation corresponds to a reduction in the purchasing energy of cash. the alternative to inflation is deflation, a sustained lower in the widespread rate level of goods and offerings. The common degree of inflation is the inflation fee, the annualized percent change in a popular charge index. As expenses no longer grow at an equal charge, the client price index (CPI) is frequently used for this reason. The employment cost index is also used for wages in the USA.

Most economists agree that high stages of inflation in addition to hyperinflation—that have severely disruptive consequences on the real financial system—are a result of chronic excessive growth within the cash supply. Views on low to slight charges of inflation are extra numerous. Low or moderate inflation can be attributed to fluctuations in actual calls for items and offerings, or adjustments in to-be-had supplies which include all-through scarcities.

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The highest yielding savings accounts are paying historically low interest rates, so Maria is only able to get a 1% annual interest rate for her savings account. Assuming interest rates do not change, use the Rule of 72 to approximate how many years it will take for her to DOUBLE her money in this account?

Answers

Using the rule of 72 it is going to take Maria a period of 72 years in order to be able to double the money that is in her account.

What is the rule of 72?

This is the term that is used to refer to the rule that helps to tell us of the number of years that would be needed in order to be able to double the amount of invested money of a person.

The formula for the rule of 72 is given as

t = 72 / r

where

t = years

r = rate in percentage

Hence we can say that

72 / 1%

Hence the period that it would take to double the money would be 72 years.

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1.What is a business transaction?

Answers

Answer:

A business transaction is an event involving an interchange of goods, money or services between two or more parties.

Explanation:

A business transaction is an event involving an interchange of goods, money or services between two or more parties.  The business transacted can be between two parties engaged in business and conducting the transaction for their mutual benefits, or between a business entity, like a retail shop, and a customer.

what is work?

1. Work refers to any useful activity.
2. Is a business.
3. Consist of certain tasks.
4. Series of related jobs or occupations.

Answers

Work refers to any useful activity.

Answer:

4

Explanation:

A job, employment, work or occupation, is a person's role in society. More specifically, a job is an activity, often regular and often performed in exchange for payment. Many people have multiple jobs. A person can begin a job by becoming an employee, volunteering, starting a business, or becoming a parent

For the Pure Monopoly Market Structure 2 a. Explain how the monopolist determines the profit maximizing level of output and price. Be specific. i. Please use what you have learned about using the MR MC approach along with the use of the appropriate cost curves to create your answer.
b. You are employed by a firm with monopoly power. The boss wants to increase profits. Explain the power of price discrimination to your boss. Discuss the requirements and assumptions for successfully implementing this approach, and the likely outcomes. i. You should explain price discrimination and its 3 forms, the conditions for price discrimination, and the outcomes of price discrimination for the Pure Monopolist.

Answers

a. A monopolist determines the profit maximizing level of output and price by equating marginal revenue (MR) to marginal cost (MC). The monopolist produces the quantity at which MR=MC and sets the price based on the demand curve.

Specifically, the monopolist selects the price at which the corresponding quantity demanded on the demand curve equals the quantity determined by MR=MC. The monopolist will produce a quantity where MR is greater than MC until they reach a point where MR=MC.

b. Price discrimination refers to the practice of charging different prices to different customers for the same product or service.

The three types of price discrimination are first-degree, second-degree, and third-degree. For successful implementation of price discrimination, the monopolist must have market power, and there must be a difference in the price elasticity of demand among the groups.

Price discrimination can increase profits by capturing more consumer surplus and reducing deadweight loss. However, it can also lead to consumer resentment and legal challenges.

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Cree industrial lighting company is looking to deepen its capital. Which one of these steps should the Cree company take to accomplish this?
Group of answer choices
(A) Refinance their business loans and decrease their carried debt amount.
(B) Restructure and reorganize its departments to shorten production time.
(C) Invest in additional education and advanced training programs for their employees.

Answers

Cree industrial lighting company can take several steps to deepen its capital. One option is to issue more shares of stock to raise funds from investors.

This can be done through a public offering or a private placement. Another option is to seek out a strategic partnership or joint venture with another company to increase their market share and revenue. Cree can also consider taking on debt by issuing bonds or securing loans from banks or other financial institutions.

Additionally, they can explore the possibility of selling off non-core assets or restructuring their operations to reduce costs and increase profitability. Whatever approach they choose, it is important for Cree to carefully evaluate the potential risks and benefits of each option before taking any action.

By doing so, they can make informed decisions that will help them achieve their financial goals and position themselves for long-term success.

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(A) Refinancing their business loans and decreasing their carried debt amount would be a step that Cree Industrial Lighting Company could take to deepen its capital.

By refinancing their business loans, they may be able to secure lower interest rates or more favorable loan terms, which can reduce their overall debt burden and free up cash flow for other uses. This can increase the company's financial stability and flexibility, which may be attractive to potential investors. Restructuring and reorganizing departments or investing in employee education and training are other strategies that can improve a company's performance and profitability over the long term, but they may not directly address the issue of deepening capital.

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Consider an economy made up of 100 people who are sixteen years of age and older, 60 of whom hold jobs, 10 of whom are looking for work, and 15 of whom are retired. The number of people in the labor force is _____.

Answers

Answer:

Labor force= 70

Explanation:

Giving the following information:

Consider an economy made up of 100 people:

60 of whom hold jobs

10 of whom are looking for work

15 of whom are retired

The labor force is the number of people of age 16 or more that are working or actively looking for one.

Labor force= 60 + 10

Labor force= 70

A bond has a par value of $10,000 and currently has a price of $9,500. The bond pays a rate of 5% over 5 years. Calculate the current yield. The same bond started the year with a price of $9,500 and is expected to be sold for $9,750. What is the Capital Gains Yield

Answers

Answer:

The current yield is 5.2% and capital gain is 2.63%.

Explanation:

The par value of bond = $10000

Current price = $9500

Annual coupan payment = 5%

Annual coupan  payment = 10000 × 5% = $500

Now calculate the current yield.

The current yield =  annual coupon payment / current price  

The current yield =   500 / 9500 = 0.052 or 5.2%  

Now calculate the capital gain. In the question, it says that it starts at $9500 so its original price is 9500.

Capital gain yield = (9750 – 9500) / 9500 = 0.0263 or 2.63%

Suppose that a year of college has the following explicit costs: $17000 in tuition, $1000 in books and supplies, and $1500 for a computer. A year of college also has the following implicit cost: $35000 of foregone salary. A rational person would attend one year of college if the additional income and improved quality of life were worth how much

Answers

Answer:

A rational person would attend one year of college if the additional income and the improved quality of life were worth more than the cost of attending college for the year or more than $19,500

Explanation:

The given parameters are;

The tuition cost for a year of college = $17,000

The cost of books and supplies = $1,000

The cost for a computer = $1,500

The amount of forgone salary = $35,000

Therefore, the total cost for a year of college = $17,000 + $1,000 + $1,500 + $35,000 = $54,500

However, the amount by which a year in college exceeds the previous income = The cost of going to college  $17,000 + $1,000 + $1,500 = $19,500

Therefore, a rational person would attend one year of college if the additional or extra income above the previous income and the improved quality of life were worth more than the cost of going to college for one year which is $19,500.

Examine the recruiting advertisements of two similar service-oriented organizations. Then go to the companies’ websites and examine their stated human resources and employee development policies. Answer the following questions:
1. Can you tell anything from the job ads about the companies’ mission and values? Analyze and explain. (4 marks)
2. What are the similarities and differences of the required competencies in the job ads? (6 marks)
3. Are the messages in their print ads consistent with the statements in their websites? Yes/No and what are you seeing as inconsistent? (3 marks)
4. What is their approach to collecting resumes and creating an applicant pool? What are your thoughts on the process and is it effective? (5 marks)

Answers

1. Analyzing the job , we can tell a lot about a company’s mission and values.

2. Both Company A and Company B’s job advertisements require similar competencies in their employees, such as being able to multitask and prioritize customer needs, strong communication skills, and attention to detail.

3. The messages in the print ads of Company A and Company B are consistent with the statements in their websites.

4. Both companies appear to have similar approaches to collecting resumes and creating an applicant pool.

1. Analyzing the job ads, we can tell a lot about a company’s mission and values. In the case of the service-oriented organizations that are being compared, it is possible to determine that the two organizations have a similar mission and value proposition based on their job ads. For instance, Company A and Company B both require that their candidates have excellent customer service skills, as well as being able to multitask and perform other administrative duties as assigned.

2. Both Company A and Company B’s job advertisements require similar competencies in their employees, such as being able to multitask and prioritize customer needs, strong communication skills, and attention to detail. However, the two companies differ in the specific competencies required, with Company A emphasizing the ability to work independently and with a team, while Company B emphasizes prior customer service experience and flexibility in work hours.

3. The messages in the print ads of Company A and Company B are consistent with the statements in their websites. Both companies emphasize their commitment to customer service and employee development, and their job ads reflect this by emphasizing the importance of excellent customer service skills and the opportunity for career advancement. However, Company A’s website provides more detailed information on their employee development programs than their job ad, while Company B’s website emphasizes employee benefits more than their job ad.

4. Both companies appear to have similar approaches to collecting resumes and creating an applicant pool. They both request that applicants submit their resumes online, and they both have a form on their website where applicants can submit their information for consideration. It is difficult to determine the effectiveness of this approach without more information on the number of applicants and the quality of their resumes. However, it is a common practice in the industry, and it allows companies to more easily manage and sort through resumes to find the most qualified candidates.

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gilmore issued $100,000 face value 6% bonds for $95,000. assuming gilmore utilizes a discount account, the journal entry to record the issuance of the bonds would include which of the following entries?

Answers

The journal entry to record the issuance of the bonds issued by Gilmore at a discount would typically include the following entries:

1. To record the cash received from the bond issuance: Debit: Cash (for the amount received, $95,000) Credit: Bonds Payable (for the face value of the bonds, $100,000)

2. To record the discount on bonds payable  Debit: Discount on Bonds Payable (for the difference between the face value and the cash received, which is $5,000 in this case)

 

Credit: Bonds Payable (for the face value of the bonds, $100,000) The discount on bonds payable account represents the difference between the face value of the bonds and the amount received from their issuance.

The discount is amortized over the life of the bonds and reduces the interest expense recognized in each period.

It's important to note that the specific accounts used may vary depending on the company's chart of accounts and accounting practices.

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Your company has sent you an email telling you your department must increase the daily output goal of 120 widgets per hour, to 126 widgets per hour. Everyone on your team recognizes more efficient production will lead to more profit for the company, and a higher chance for a raise for each of them. As usual, you will hold a brief meeting explaining the new directive and provide the deadline as to when this new daily production goal must be met with regularity. The meeting ends after a couple of clarifying questions and answers, and you and your employees get back to work on meeting the deadline for the new goal. What management theory best describes the management style of this company? What leadership style will you employ to get the required increase in production of widgets your company requested? Why is this leadership style the best fit for this scenario?

Answers

Answer:

Participative Leadership style.

Explanation:

Participative leadership, also known as democratic leadership, is one in which the leader has the central focus of employee engagement and participation in important company decisions. In this style of leadership, the manager has a crucial role of being the main motivator and advisor of the team, being solicitous to guide, coordinate and assist his subordinates in all their work demands, so that the goals and organizational goals are achieved.

This style of participatory leadership would be more appropriate for this scenario as there are deadlines for completing tasks, which requires a motivated and productive team, which is essential in participatory leadership.

The motivation of employees is achieved due to clear and guiding communication from the leader, which creates the perception of inclusion and appreciation of the employee, who feels an essential and important part of the organization.

hoodoo voodoo company has total assets of $64,500, net working capital of $19,450, owners' equity of $31,610, and long-term debt of $22,090. what is the company's current assets?

Answers

The Hoodoo Voodoo Company has a total asset value of $64,500, net working capital of $19,450, owners' equity of $31,610, and long-term debt of $22,090. The company's current assets are $30,250.

An asset is what?

A resource with a monetary value that is owned or managed by a person, company, or nation in the expectation that it will be beneficial in the future is known as an asset. Assets are shown on a company's balance sheet and are purchased or constructed to increase the company's value or facilitate better operations.

A future asset may increase revenue, reduce expenses, or increase sales. A patent or a piece of manufacturing machinery can be the subject here. You can sell the things you possess for money; these are your assets. An asset is any resource that a company owns or has control over in accounting terms.

Calculation:

Current liabilities = $64,500 - $31,610 - $22,090 = $10,800.

Current assets are $19,450 + $10,800 = $30,250.

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What types of planning can be done to improve a nation’s economy?
A nation can undergo ____ planning or ___ planning in order to improve its economy.

Answers

Answer:

A nation can undergo long-term planning or constructive planning in order to improve its economy. Long-term planning involves setting goals and implementing policies that will have an impact over a period of several years. This type of planning may involve investments in education, infrastructure, and research and development, among other areas. Constructive planning involves implementing policies that encourage economic growth and development, such as reducing barriers to trade, promoting entrepreneurship and innovation, and investing in key industries. These types of planning can help a nation to create jobs, increase productivity, and improve living standards for its citizens. THANK YOU

What are 2 pros and 2 cons of working minimum wage

Plz help

Answers

Answer:

They raise prices or reduce the number of hours worked. Worker morale, productivity, and consumer spending all increase. But the pros only outweigh the cons if the minimum wage isn't too high. Wages cannot be so high that they reduce a company's ability to keep labor costs low during a recession.

Explanation:

In pure competition, producers compete exclusively on the basis of
a. selling identical items.
b. advertising heavily to promote their good.
c. producing the unique features of their good.
d. focusing on maintaining a positive image.

Answers

Answer:

a. selling identical items.

Explanation:

A pure competition market is characterized by many firms selling a homogeneous product in a market with many buyers. There are no dominant suppliers; hence no single or group of sellers can influence the price.  Pure competition is also the perfect competition.

The key characteristics of pure competition are

There are many buyers and sellersAll firms sell an identical productAll sellers are price takers. None can influence pricesThere is intense competition due to the high number of sellersEase of entry and exit from the market.

A. selling identical items.

What about this profile would most appeal to a recruiter from a public relations firm? Check all that apply. the username the biography the favorite quote the most recent post the number of followers

Answers

Answer:

B. the biography

D. the most recent post

E. the number of followers

Explanation:

Correct on ED2022! Good Luck! <3

The items on a profile that appeal to recruiters are he biography the favorite quote the most recent post the number of followers.

What is meant by the term Profile?

In recent times social media has drifted processes from tradition to digital, the term profile is used to describe the information of a user.

Recruitment officers now utilise this feature to source for talent by reading up about a prospective employee and engaging with them virtually.

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The risk-free rate is 2.7% and the market risk premium is 6.74%. A stock with a β of 1.68 just paid a dividend of $2.1. The dividend is expected to grow at 20.37% for five years and then grow at 3.25% forever. What is the value of the stock? Currency: Round to: 2 decimal place

Answers

The risk-free rate is 2.7% and the market risk premium is 6.74%. A stock with a β of 1.68 just paid a dividend of $2.1. The dividend is expected to grow at 20.37% for five years and then grow at 3.25% forever. The value of the stock is approximately $35.07.

To calculate the value of the stock, we can use the dividend discount model (DDM), which takes into account the present value of the expected future dividends. The formula for the DDM is:

Value of stock = (Dividend / (1 + Cost of Equity - Dividend Growth Rate)) + (Dividend * (1 + Dividend Growth Rate) / (Cost of Equity - Dividend Growth Rate))

Given information:

Dividend (D0) = $2.1

Dividend growth rate (g1) = 20.37%

Dividend growth rate (g2) = 3.25%

Beta (β) = 1.68

Risk-free rate = 2.7%

Market risk premium = 6.74%

First, we need to calculate the cost of equity using the Capital Asset Pricing Model (CAPM):

Cost of Equity = Risk-free rate + (Beta * Market risk premium)

= 2.7% + (1.68 * 6.74%)

= 14.66%

Next, we can calculate the present value of the dividends for the first five years:

PV(D1) = D0 * (1 + g1) / (1 + Cost of Equity)

= $2.1 * (1 + 20.37%) / (1 + 14.66%)

= $2.1 * 1.2037 / 1.1466

= $2.2046

PV(D2) = D1 * (1 + g1) / (1 + Cost of Equity)

= $2.2046 * (1 + 20.37%) / (1 + 14.66%)

= $2.2046 * 1.2037 / 1.1466

= $2.3077

PV(D3) = D2 * (1 + g1) / (1 + Cost of Equity)

= $2.3077 * (1 + 20.37%) / (1 + 14.66%)

= $2.3077 * 1.2037 / 1.1466

= $2.4113

PV(D4) = D3 * (1 + g1) / (1 + Cost of Equity)

= $2.4113 * (1 + 20.37%) / (1 + 14.66%)

= $2.4113 * 1.2037 / 1.1466

= $2.5176

PV(D5) = D4 * (1 + g1) / (1 + Cost of Equity)

= $2.5176 * (1 + 20.37%) / (1 + 14.66%)

= $2.5176 * 1.2037 / 1.1466

= $2.6261

Next, we calculate the present value of the perpetual dividend using the perpetuity formula:

PV (Perpetual Dividend) = D5 / (Cost of Equity - g2)

= $2.6261 / (14.66% - 3.25%)

= $2.6261 / 11.41%

= $23.00

Finally, we can calculate the value of the stock:

Value of stock = PV(D1) + PV(D2) + PV(D3) + PV(D4) + PV(D5) + PV (Perpetual Dividend)

= $2.2046 + $2.3077 + $2.4113 + $2.5176 + $2.6261 + $23.00

= $35.07

Therefore, the value of the stock is approximately $35.07.

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The table shows the price and quantity demanded for exercise balls. Using the Midpoint Method, what is the price elasticity of demand between points B and C?Point Price QuantityA $30 10,000B $32 9,900C $34 9,800D $36 9,700E $38 9,60

Answers

The price elasticity of demand between points B and C is 0.167.

The price elasticity of demand using the Midpoint Method between points B and C.

To calculate the price elasticity of demand between points B and C, we will use the following formula:

Price Elasticity of Demand (PED) = (% Change in Quantity Demanded) / (% Change in Price)

First, we need to calculate the percentage changes in both quantity demanded and price.

For quantity demanded:

1. Find the difference between quantities at points B and C: 9,900 - 9,800 = 100
2. Calculate the average quantity: (9,900 + 9,800) / 2 = 9,850
3. Calculate the percentage change in quantity demanded: (100 / 9,850) x 100 = 1.015%

For price:

1. Find the difference between prices at points B and C: $34 - $32 = $2
2. Calculate the average price: ($32 + $34) / 2 = $33
3. Calculate the percentage change in price: (2 / 33) x 100 = 6.061%

Now, apply the Midpoint Method formula:

Price Elasticity of Demand (PED) = (1.015% / 6.061%) = 0.167

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