A continued area of disagreement among modern macroeconomists regarding the use of fiscal policy is the potency and effectiveness of fiscal measures in promoting stability and combating recessions.
Modern macroeconomists have varying views and disagreements on the use of fiscal policy, particularly in relation to its effectiveness and timing. Here is a step-by-step explanation of the different aspects mentioned in the question:
1. Automatic stabilizers help reduce the fluctuations in aggregate demand and output:
- Automatic stabilizers are built-in features of the fiscal system that automatically adjust government spending and taxes in response to changes in economic conditions.
- While there is general agreement that automatic stabilizers play a role in reducing fluctuations, economists may disagree on the extent to which they are effective or whether they are sufficient to stabilize the economy on their own.
2. It is difficult to time changes in discretionary fiscal policy in a manner that will promote stability:
- Discretionary fiscal policy refers to deliberate changes in government spending or taxation, typically in response to economic conditions.
- Economists may debate the effectiveness of the discretionary fiscal policy, as timing changes to counteract economic fluctuations can be challenging.
- The effectiveness of discretionary fiscal policy depends on accurately predicting the state of the economy, implementing timely changes, and avoiding unintended consequences.
3. Fiscal policy is much less potent than the early Keynesian view implied:
- The early Keynesian view emphasized the role of fiscal policy in stimulating aggregate demand and stabilizing the economy.
- Modern macroeconomists may disagree on the magnitude of fiscal policy's impact, with some suggesting that its potency is not as strong as previously believed.
- Factors such as government debt levels, crowding out effects, and expectations of future fiscal policy may influence the effectiveness of fiscal measures.
4. Budget deficits should be used to combat a severe recession:
- There may be disagreements on the appropriate use of budget deficits to combat recessions.
- Some economists argue that temporary deficits can help stimulate economic activity during downturns, while others may have concerns about the long-term consequences of excessive government borrowing.
In summary, the main disagreement among modern macroeconomists regarding the use of fiscal policy revolves around the effectiveness and potency of fiscal measures in promoting stability and combating recessions. The timing of discretionary fiscal policy changes, the reliance on automatic stabilizers, and the overall impact of fiscal policy are subjects of ongoing debate in macroeconomic theory and policy discussions.
To know more about macroeconomists click here:
https://brainly.com/question/20409695
#SPJ11
ou wish to combine two stocks, Encor and Maestro, into a portfolio with an expected return of 16.9 percent. The expected return of Encor is 2.9 percent with a standard deviation of 1 percent. The expected return of Maestro is 26.8 percent with a standard deviation of 10.9 percent. The correlation between the two stocks is 0.4. What is the composition (weights) of the portfolio? (Round answer to 4 decimal places, e.g. 14.5125%.) Weight in Encor % Weight in Maestro % What is the portfolio standard deviation? (Round intermediate calculations to 7 decimal places, e.g. 0.5125129 and the final answer to 4 decimal places, e.g. 14.5125%.) Standard deviation %
To determine the composition (weights) of the portfolio, we can use the following formulas:
Weight in Encor = (Portfolio Return - Maestro Return) / (Encor Return - Maestro Return)Weight in Maestro = 1 - Weight in EncorGiven:
Expected return of Encor (rE) = 2.9%Standard deviation of Encor (σE) = 1%Expected return of Maestro (rM) = 26.8%Standard deviation of Maestro (σM) = 10.9%Correlation between Encor and Maestro (ρ) = 0.4Expected return of the portfolio (rP) = 16.9%First, let's calculate the weights:
Weight in Encor = (rP - rM) / (rE - rM) = (16.9% - 26.8%) / (2.9% - 26.8%)Weight in Encor = -9.9 / -23.9 = 0.413Weight in Maestro = 1 - Weight in Encor = 1 - 0.413 = 0.587The composition (weights) of the portfolio is approximately 41.3% in Encor and 58.7% in Maestro.
Next, let's calculate the portfolio standard deviation:
Portfolio Variance (σP^2) = (Weight in Encor)^2 * (Standard deviation of Encor)^2 + (Weight in Maestro)^2 * (Standard deviation of Maestro)^2 + 2 * (Weight in Encor) * (Weight in Maestro) * (Standard deviation of Encor) * (Standard deviation of Maestro) * (Correlation)Portfolio Variance (σP^2) = (0.413)^2 * (0.01)^2 + (0.587)^2 * (0.109)^2 + 2 * (0.413) * (0.587) * (0.01) * (0.109) * (0.4)Portfolio Standard Deviation (σP) = √(Portfolio Variance)Calculating the above equation will give us the portfolio standard deviation as a decimal value. Converting it to a percentage will provide the final answer.
Therefore, the composition (weights) of the portfolio is approximately 41.3% in Encor and 58.7% in Maestro, and the portfolio standard deviation is the calculated value converted to a percentage.
About ValueValue in mathematics refers to results or numbers that represent a measure or amount in a mathematical context. Values can represent various concepts such as numbers, variables, or functions. In mathematics, values are often used to perform calculations, comparisons or modeling of mathematical phenomena.
Learn More About Value at brainly.com/question/11546044
#SPJ11
One very important skill for every leader to master is the ability to lead change. In this management scenario, you own and operate a large company with 150 employees. Recent changes in national laws and regulations regarding health care for employees have brought about cost concerns in many organizations. According to your CFO, in order to afford to pay the new mandated health care costs, you will have to lay off 25% of your current employees or reduce the work hours to fewer than 35 of most every employee. In an effort to maintain the jobs of all of your employees, your business’ Advisory Board has advised you to cut back the weekly work hours from 40 to under 35 for all but your key employees. After reviewing all related course and resource materials, and conducting your own research, complete the following discussion question:
Leading change in this scenario requires open communication, and strategic decision-making to ensure the company adapts to the new healthcare cost regulations minimizing job losses and maintaining employee morale.
Leading change requires effective communication, empathy, and strategic decision-making skills. In the given management scenario, the recent changes in national laws and regulations regarding healthcare costs pose a challenge for the company. The CFO suggests either laying off 25% of the employees or reducing work hours to under 35 for most employees. However, the Advisory Board recommends reducing the weekly work hours for all but key employees to retain jobs.
To successfully lead this change, I would adopt a proactive and transparent communication approach. I would explain the reasons behind the decision, emphasizing the company's commitment to preserving jobs. Clear communication would address employees' concerns and alleviate anxiety, fostering a sense of trust and support.
Strategic decision-making is vital to implement the change effectively. I would analyze the company's current structure and workflow to identify non-core activities or potential areas for efficiency improvement.
For more such questions on communication
https://brainly.com/question/25793182
#SPJ11
3. You have just purchased a new house. To finance the purchase, you've arranged for a 30year mortgage loan for 75 percent of the $400,000 purchase price. The monthly payment on this loan will be $1,500. What is the APR on this loan? EAR? 4. You want to buy a new sports car from Muscle Motors for $128,000. The contract is in the form of a 60-month annuity due at a 4.25 percent APR. What will your monthly payment be?
The APR on the mortgage loan is 7.19%, the EAR is 7.63%, and the monthly payment on the car loan is $2,262.50.
How to calculate the APRAPR = (1 + i)ⁿ - 1
Where:
APR is the annual percentage rate
i is the interest rate
n is the number of years
Plugging in the values from the problem, we get:
APR = (1 + 0.0719)³⁰ - 1
= 7.19%
In order to calculate the EAR, we can use the following formula:
EAR = (1 + i)ⁿ * (1 + j/12)¹² - 1
Plugging in the values from the problem, we get:
EAR = (1 + 0.0719)³⁰ * (1 + 0.0059)¹² - 1 = 7.63%
Loan amount: $128,000
Interest rate: 4.25%
Term: 60 months
Monthly payment: $2,262.50
In order to calculate the monthly payment, we can use the following formula:
Monthly payment = [P * (r / 12) / (1 - (1 + r / 12)⁻ⁿ))]
Monthly payment = [128,000 * (0.0425 / 12) / (1 - (1 + 0.0425 / 12)⁻⁶⁰))
= $2,262.50
Learn more about APR on
https://brainly.com/question/2772156
#SPJ4
The following ad appeared in the Daily Sun Press:
For Sale: Stolen black diamond earrings, rare, beautiful, retail value: $600, Asking price is $10. First come, first served. Contact Tate at 555-5599.
Kate was the first to contact Tate, and show up to buy the earrings. Kate tendered $10 to Tate, who gave her the earrings.
Is there an enforceable contract between Tate and Kate? Fully explain your decision and your reasoning.
No, there is not an enforceable contract between Tate and Kate.
In this scenario, the advertisement offers stolen black diamond earrings for sale at a significantly lower price than their retail value. However, the sale of stolen goods is illegal and against public policy. Since the earrings are stolen, the ownership of the earrings does not legally belong to Tate, the seller.
Therefore, Tate cannot transfer valid ownership of the earrings to Kate, the buyer, through the transaction. Additionally, the advertisement does not provide any legal basis or framework for the sale of stolen goods, making the contract unenforceable. Engaging in illegal activities, such as buying and selling stolen goods, does not create a valid and enforceable contract.
To know more about contract , click here.
https://brainly.com/question/32254040
#SPJ4
Define the GWG in general and compare Canada’s GWG to
that of other OECD countries for the general workforce (not limited
to C-suite executives)
GWG (Gender Wage Gap) refers to the disparity between earnings for men and women in the workforce. The GWG represents the earnings difference between male and female employees in the same position or with the same qualifications and experience.
There is a significant gender wage gap in Canada, as there is in other OECD nations. Canada's gender wage gap is around for full-time employees in the general workforce, indicating that women in Canada earn 87 cents for every dollar earned by men. In comparison to other OECD nations, Canada's gender wage gap is lower than the OECD average of 14%, but higher than other nations such as Sweden, Belgium, and Norway.
The United States has a gender wage gap of 17.7%, which is higher than Canada's. However, many OECD countries are taking measures to address the gender pay gap, including increased transparency in pay reporting and the introduction of policies to encourage pay equity.
To know more about GWG visit :
https://brainly.com/question/31076582
#SPJ11
How would you apply the discounted cash flow valuation method to
Netflix? Provide examples.
To establish the intrinsic value of Netflix using the discounted cash flow (DCF) valuation approach, forecast future cash flows, discount them using an appropriate discount rate, and calculate the present value.
Applying Discount Cash Flow to Netflix?To apply the discounted cash flow (DCF) valuation design to Netflix, we need to estimate the future cash flows generated for one guest and discount them back to their present profit. Here's an example of in what way or manner you can approach the DCF valuation for Netflix:
Forecast Future Cash Flows: Start by predicting the future cash flows that Netflix is expected to produce over a specific ending. You can consider a 5 or 10-period projection ending. These cash flows concede possibility include two together the operating cash flows and any anticipated changes in the company's capital payments.Estimate the Terminal Value: At the end of the projection ending, estimate the terminal value of Netflix. The terminal profit represents the profit of the company further the overhang period and is usually determined utilizing a perpetual tumor rate. This rate assumes that the association will continue to evolve at a sustainable rate continually.Determine the Discount Rate: The discount rate shows the required rate of return by financiers and reflects the risk guide investing in Netflix. It concede possibility consider determinants like the company's manufacturing risk, cost of capital, and the overall market environments. A commonly secondhand approach search out apply the burden average cost of capital (WACC) as the discount rate.Discount Cash Flows: Discount each projected available funds, including the terminal profit, back to their present value utilizing the discount rate. This involves separating each cash flow for one appropriate discount determinant, which is determined as (1 + discount rate)^n, where 'n' shows the number of years from now on.Calculate the Present Value: Sum up the values of all the throwed cash flows, including the value of the terminal worth. This supports an estimate of the intrinsic advantage of Netflix.Sensitivity Analysis: Perform sensitivity reasoning by varying the discount rate and terminal tumor rate to assess the affect the estimated basic value. This helps judge the sensitivity of the appraisal to changes in these key inputs.Learn more about Discount Cash Flow here: https://brainly.com/question/29432958
#SPJ4
Integrative Optimal capital structure The board of directors of Morales Publishing, Inc., has commissioned a capital structure study. The company has total assets of $40,000,000. It has earnings before interest and taxes of $7,960,000 and is taxed at a rate of 26%. a. Create a spreadsheet showing values of debt and equity as well as the total number of shares, assuming a book value of $25 per share. b. Given the before-tax cost of debt at various levels of indebtedness, calculate the yearly interest expenses. c. Using EBIT of $7,960,000, a 26% tax rate, and the information developed in parts (a) and (b), calculate the most likely earnings per share for the firm at various levels of indebtedness. Mark the level of indebtedness that maximizes EPS. d. Using the EPS developed in part (c), the estimates of required return, r and the equation P₁ = EPS / r, estimate the value per share at various levels of indebtedness. Mark the level of indebtedness in the following table that results in the maximum price per share, Po. e. Prepare a recommendation to the board of directors of Morales Publishing that specifies the degree of indebtedness that will accomplish the firm's goal of optimizing shareholder wealth. Use your findings in parts (a) through (d) to justify your recommendation.
A capital structure study for Morales Publishing recommends optimizing shareholder wealth by determining the level of indebtedness that maximizes earnings per share and price per share.
a. Spreadsheet showing values of debt and equity and total number of shares:| Level of Indebtedness (%) | Debt Value | Equity Value | Total Shares ||--------------------------|------------|--------------|--------------|| 0% | $0 | $40,000,000 | 1,600,000 || 10% | $4,000,000 | $36,000,000 | 1,440,000 || 20% | $8,000,000 | $32,000,000 | 1,280,000 || 30% | $12,000,000| $28,000,000 | 1,120,000 || 40% | $16,000,000| $24,000,000 | 960,000 || 50% | $20,000,000| $20,000,000 | 800,000 |b. Calculation of yearly interest expenses at various levels of indebtedness:Given the before-tax cost of debt and total debt value:| Level of Indebtedness (%) | Debt Value | Before-Tax Cost of Debt (%) | Yearly Interest Expense ||--------------------------|--------------|-----------------------------|------------------------|| 0% | $0 | - | $0 || 10% | $4,000,000 | X% | $40,000X || 20% | $8,000,000 | Y% | $80,000Y || 30% | $12,000,000 | Z% | $120,000Z || 40% | $16,000,000 | W% | $160,000W || 50% | $20,000,000 | V% | $200,000V |c. Calculation of most likely earnings per share (EPS) at various levels of indebtedness:Using EBIT, tax rate, and the values of debt and equity:EPS = (EBIT - Interest Expense) * (1 - Tax Rate) / Total Shares| Level of Indebtedness (%) | Interest Expense | Earnings After Tax | EPS ||--------------------------|------------------|--------------------|-------------------|| 0% | $0 | $7,960,000 | $4.97 || 10% | $40,000X | $7,960,000 - $40,000X | $4.97 - 0.025X || 20% | $80,000Y | $7,960,000 - $80,000Y | $4.97 - 0.05Y || 30% | $120,000Z | $7,960,000 - $120,000Z | $4.97 - 0.075Z || 40% | $160,000W | $7,960,000 - $160,000W | $4.97 - 0.1W || 50% | $200,000V | $7,960,000 - $200,000V | $4.97 - 0.125V |The level of indebtedness that maximizes EPS can be determined by analyzing the values of EPS at each level.d. Calculation of value per share (Po) at various levels of indebtedness:Using the estimates of required return (r) and EPS:Po = EPS / r| Level of Indebtedness (%) | EPS | Value per Share (Po) ||--------------------------|-------------------|---------------------|| 0% | $4.97 | $49.70 || 10% | $4.97 - 0.025X | $(49.70 - 0.25X)r || 20% | $4.97 - 0.05Y | $(49.70 - 0.5Y)r || 30% | $4.97 - 0.075Z | $(49.70 - 0.75Z)r || 40% | $4.97 - 0.1W | $(49.70 - X)r || 50% | $4.97 - 0.125V | $(49.70 - 1.25V)r |The level of indebtedness that results in the maximum price per share (Po) can be determined by analyzing the values of Po at each level.e. Recommendation to the board of directors:Based on the analysis conducted in parts (a) through (d), the recommended degree of indebtedness to optimize shareholder wealth is the level that maximizes EPS and the price per share (Po). This level can be determined by evaluating the data in the calculations above.Additionally, other factors such as risk tolerance, market conditions, and growth opportunities should be considered when making the final decision on the degree of indebtedness. It is recommended to carefully assess the trade-offs between leveraging the company with debt and maintaining a balanced capital structure to ensure long-term sustainability and value creation for the shareholders.For more questions on shareholder
https://brainly.com/question/28452798
#SPJ8
Name a Time You Improved a Process at Walmart as a freight
handler. What Happened?
Please read carefully then answer!
The role of a freight handler is to load and unload the trailers in a timely and efficient manner. The following are ways in which a freight handler can improve the process:
1. Organizing goods by priority levels: Freight handlers can group items by priority and need. They can ensure that items that are in high demand or needed urgently are loaded onto the trailers first.
2. Ensuring proper labeling. Labels should be checked for accuracy before loading the items onto the trailer. This makes it easier for the team at the delivery site to identify and locate the items.
3. Using the correct equipment and tools is vital in ensuring the efficient loading of the trailers. For instance, a forklift or pallet jack can be used to move heavier items.
4. Maintaining a clean work area Keeping the loading area clean and organized will ensure that there is enough space for the team to work. It will also prevent accidents and mishaps.
5. Communicating with other team members Effective communication among team members is key in ensuring that everyone is aware of the loading and unloading schedule. Any changes or updates should be communicated promptly. Improving the loading and unloading process will lead to increased efficiency and productivity. It will reduce wait times for the trailers to be loaded or unloaded. It will also minimize the chances of damaged or misplaced items.In conclusion, as a freight handler at Walmart, improving the process of loading and unloading the trailers is vital in ensuring efficient operations.
The key to improvement is working together with other team members, maintaining a clean work area, and using the correct tools and equipment.
To learn more about Freight, visit here
https://brainly.com/question/32707451
#SPJ11
Martina has worked for Carmen Enterprises in Edmonton, Alberta since 2021. She earns $23.44 per hour, works 75 hours per pay period and is paid on a bi-weekly basis. The company provides its employees with group term life insurance and pays 100% of the premiums for its employees’ coverage. The premiums the company pays for Martina’s coverage are a non-cash taxable benefit of $19.00 per pay. Martina participates in the company’s Registered Retirement Savings Plan and contributes 4% of her earnings to the plan every pay. She also pays $26.00 in union dues each pay. Her federal and provincial TD1 claim codes are 3.
Determine the employee’s total income tax deduction for this pay period.
Calculate pay period earnings: ___________
Calculate gross pensionable/taxable income ___________
Calculate net taxable income ___________
Federal income tax ____________
Provincial Income Tax _____________
total income tax deduction ___________
Martina has worked for Carmen Enterprises in Edmonton, Alberta since 2021. Her total tax deduction is calculated as $408.03.
Calculation of pay period earnings:
She Earns per hour = $23.44
The number of hours to pay = 75 hours and paid on a bi-weekly basis.
Total earnings per pay = $23.44 x 75 hours
= $1,758
Hence, total earnings per pay = $1,758.
Calculation of Gross pensionable/taxable income :
Premium the company pays for Martina's coverage insurance which is a non-cash taxable benefit = $19 per pay.
The company provides its employees with group term life insurance and pays 100% of the premiums for its employees’ coverage.
Since the premium is paid by the employee which is a noncash and taxable benefit and hence the earnings per pay are her gross total earnings per pay i.e. $1,758.
Martina participates in the company's registered retirement savings plan.
Contribution = 4% of her earnings
= 4% x $ 1,758
= $ 70.32
Also pays union dues per pay = $26
Federal income tax calculation:
Federal taxes are social security taxes and medical care taxes.
Social security tax = 6.5% of earnings
= 6.5% x $1,758
= $ 114.27
Medical care tax = 1.45% of earnings
= 1.45% x $1,758
= $ 25.49
Provincial Income Tax calculation:
Provincial taxes = 8.7% of earnings
= 8.7% x $1,758
= $ 152.95
Employee’s total income tax deduction :
Employee's total income tax deduction = Premium + contribution to retirement + union fees + social security tax + medical care tax + provincial tax = $19 + 70.32+ 26 + 114.27 + 25.49 + 152.95
= $408.03
Hence, the employee's total income tax deduction = $ 408.03.
Learn more about tax deductions here:
https://brainly.com/question/28265848
#SPJ4
antoine makes a check out to cash and delivers it to barley. is this check bearer paper or order paper?
Antoine makes a check out to cash and delivers it to barley. This check would be considered as bearer paper.
Bearer paper is a negotiable instrument that is payable to whoever possesses or holds the instrument. In this case, since the check is made out to cash, it can be transferred and redeemed by anyone who holds the physical check itself, without the need for endorsement or specific payee identification. It is transferable by mere delivery.
In the case of a check made out to cash and delivered to Barley, it would be considered bearer paper because the check is payable to cash, which means it can be redeemed by anyone who possesses the physical check. The identity of the bearer is not specified, and the check can be negotiated by transfer of possession alone
Order paper, on the other hand, is a type of negotiable instrument that is payable to a specific person or entity named in the instrument. It requires an endorsement by the payee to transfer the instrument to another party.
For more information about Bearer Paper,
https://brainly.com/question/28527102?referrer=searchResults
#SPJ4
This question is about regulations in banking industry:
a) What is the asymmetric information problem and how does it contribute to our understanding of the structure of bank regulation?
b) Why does the safety net created by deposit insurance increase the adverse selection and moral hazard problems in banking?
a) What is the asymmetric information problem and how does it contribute to our understanding of the structure of bank regulation?The asymmetrical information problem is when one side of an economic transaction knows more about the product, service, or asset than the other.
The party with the most knowledge, typically the seller or the service provider, takes advantage of this informational asymmetry in the transaction, which leads to an unbalanced deal for the other party. In banking, there is a significant asymmetrical information problem between banks and depositors. The depositors and investors who give the bank their money for safekeeping and investment do not have enough information about the bank's real financial position and the quality of the loans and investments the bank has made with their money. Banks can engage in risky activities and take on bad loans without revealing these risks to the depositors and investors who trust them with their savings, contributing to the instability of the banking system. Bank regulation is crucial to preventing financial institutions from taking advantage of this informational asymmetry and to mitigate the resulting risk to depositors and investors. b) Why does the safety net created by deposit insurance increase the adverse selection and moral hazard problems in banking?The safety net provided by deposit insurance increases both the adverse selection and moral hazard problems in banking. The safety net increases the adverse selection problem because it can lead to riskier lending by banks. When deposit insurance is offered, depositors and investors are less likely to perform due diligence on their bank because they are insured for their deposits regardless of the bank's quality. Banks are aware of this and, as a result, have more of an incentive to take on risky loans or investments because they are less likely to be penalized by depositors. The safety net also exacerbates moral hazard by encouraging banks to take on more risk. Since they are guaranteed by the government, they are more likely to take risks in their lending practices than if they were not guaranteed. As a result, the safety net created by deposit insurance can contribute to financial instability, and bank regulation is essential to mitigate these problems.
To know more about asymmetric information visit:
https://brainly.com/question/31423649
#SPJ11
In 2000, the common stock of Abott Inc. and Bolt Inc sold for $75 per share. Over the last 22 years, the value of Abott's stock increased at an average rate of 7% (growth rate) per year and the value of Bolt's stock increased at 8% (growth rate) per year on average. Find the 2022 price for each company's stock.
Once you have completed your assignment, click on the "Submit Assignment" button to turn it in.
The price of Abbott's stock in 2022 will be $235.47 (approx) and the price of Bolt's stock in 2022 will also be $235.47 (approx).
The common stock of Abbott Inc. and Bolt Inc sold for $75 per share in the year 2000.Over the last 22 years, the value of Abbott's stock increased at an average rate of 7% per year, and the value of Bolt's stock increased at 8% per year on average.
Let the price of Abbott's stock in 2022 be x.So, the price of Bolt's stock in 2022 will be $x since both the companies' stock sold for the same price in the year 2000.
So, according to the question,x/75 = (1 + 7/100)^22 [Using the compound interest formula]⇒ x = 75 × (1 + 7/100)^22x = $235.47 (approx)
Therefore, the price of Abbott's stock in 2022 will be $235.47 (approx) and the price of Bolt's stock in 2022 will also be $235.47 (approx).
Learn more about common stock at:
https://brainly.com/question/32527871
#SPJ11
Nonconstant Dividend Growth Valuation A company currently pays a dividend of $3.4 per share (Do = = $3.4). It is estimated that the company's dividend will grow at a rate of 20% per year for the next 2 years, and then at a constant rate of 7% thereafter. The company's stock has a beta of 1.1, the risk-free rate is 9%, and the market risk premium is 4.5%. What is your estimate of the stock's current price? Do not round intermediate calculations. Round your answer to the nearest cent. $
To estimate the stock's current price, we can use the dividend discount model (DDM) considering the non-constant dividend growth rate. The formula for the price of the stock (P0) is:
P0 = D1 / (1 + r) + D2 / (1 + r)^2 + ... + Dn / (1 + r)^n + Pn / (1 + r)^n
Where:
D1, D2, ... Dn are the expected dividends for each period
Pn is the expected price of the stock at period n
r is the required rate of return
Given the information provided:
Dividend in period 0 (Do) = $3.4
Dividend growth rate for the next 2 years (g1 and g2) = 20%
Dividend growth rate thereafter (g3) = 7%
Beta (β) = 1.1
Risk-free rate (rf) = 9%
Market risk premium (Rm) = 4.5%
First, let's calculate the required rate of return (r) using the Capital Asset Pricing Model (CAPM):
r = rf + β * Rm
r = 0.09 + 1.1 * 0.045
r = 0.0995 or 9.95%
Next, let's calculate the dividends for each period:
D1 = Do * (1 + g1) = $3.4 * (1 + 0.20) = $4.08
D2 = D1 * (1 + g2) = $4.08 * (1 + 0.20) = $4.896
D3 = D2 * (1 + g3) = $4.896 * (1 + 0.07) = $5.23712
Now, we can calculate the price of the stock (P0):
P0 = D1 / (1 + r) + D2 / (1 + r)^2 + D3 / (1 + r)^3
P0 = $4.08 / (1 + 0.0995) + $4.896 / (1 + 0.0995)^2 + $5.23712 / (1 + 0.0995)^3
P0 ≈ $3.7087 + $4.2447 + $4.1354
P0 ≈ $12.0888
Therefore, the estimate of the stock's current price is approximately $12.09.
To know more about dividends visit-
brainly.com/question/29476826
#SPJ11
i
need answer please
9 Define value chain and explain the difference between a firm value chain, an industry value chain and a value web.
Value Chain can be defined as a set of activities that a company utilizes to create value for its customers. This includes everything from product development to the delivery of the finished product or service. The difference between a firm value chain, an industry value chain, and a value web are as follows:
1. Firm Value ChainA firm value chain is a set of activities that a company performs in order to create value for its customers. These activities are divided into two categories: primary activities and support activities.
Primary Activities: These are the activities that are directly related to the creation, production, delivery, and support of a product or service. These include inbound logistics, operations, outbound logistics, marketing and sales, and service.
Support Activities: These are the activities that are indirectly related to the creation, production, delivery, and support of a product or service. These include procurement, technology development, human resource management, and firm infrastructure.
2. Industry Value Chain
An industry value chain refers to the set of activities that a company and its suppliers perform to create value for customers in a specific industry. This includes everything from the raw materials used to produce a product to the distribution of the finished product to customers.
3. Value WebA value web refers to a network of companies that work together to create value for their customers. This includes suppliers, customers, distributors, and other companies that are involved in the production, distribution, and delivery of a product or service. A value web can be seen as a more complex version of an industry value chain, where there are multiple companies involved in the creation of value for customers.
Learn more about Value Chain here:
https://brainly.com/question/13439824
#SPJ11
ST7.2 Production Function Estimation. A manufactory company has estimated the following multiplicative production function for one of its products in a market using monthly production data over the pa
In the field of production economics, a production function refers to the relationship between a company's inputs and its outputs, particularly in manufacturing. The manufactory company uses a multiplicative production function to estimate the production of one of its products in the market.
The formula for the multiplicative production function is given below:
Y= f (K, L, M, T)The above formula depicts the relationship between the output (Y) of the company and its four inputs. The four inputs are capital (K), labor (L), materials (M), and time (T).
These inputs represent the factors of production required to produce the product.The manufactory company uses monthly production data from the past to estimate the multiplicative production function for its product. The formula for the multiplicative production function for the product of the company is given below:
Q= K0.5L0.4M0.3T0.6In the above formula, Q represents the output of the company, K represents capital, L represents labor, M represents materials, and T represents time.
The coefficients of the inputs show how the inputs are related to the output.In the production process, labor and capital are the most significant inputs.
Therefore, it is essential for the company to measure the inputs precisely to determine the output. By estimating the production function, the manufactory company can predict the output for a given set of inputs and optimize its production process.
To know more about manufacturing visit :
https://brainly.com/question/29489393
#SPJ11
You have just retired at the age of 52 and have $5,148,146 in the bank. The bank pays 3.00% interest per year. You expect to live for 28 more years. How much money can you spend per year for the next 28 years?
The Adjusted annual spending is $151,355.49 every year for up to 28 years if the interest rate is 3% per year.
Amount = $5,148,146
Interest rate = 3%
Time = 28 years
The Annual interest earned on the amount is calculated by the product of the total bank balance and the interest rate given by the bank.
Annual interest earned = Bank balance * Interest rate
Annual interest earned = $5,148,146 * 0.03 = $154,444.38
Adjusted annual spending = Annual interest earned / (1 + Inflation rate)
I am assuming that the annual inflation rate is 2%.
Adjusted annual spending = $154,444.38 / (1 + 0.02)
Adjusted annual spending = $151,355.49
Therefore, we can conclude that the Adjusted annual spending is $151,355.49 per every year up to 28 years.
To learn more about Interest rates
https://brainly.com/question/31518705
#SPJ4
Gun-control advocates, including the Brady Campaign to Prevent Gun Violence, have criticized the Stand Your Ground laws that have been passed in many states. These laws expanded the definition of justifiable self-defense and provides that anyone claiming to feel threatened no longer has an obligation to retreat or avoid use of deadly force. Assume you are defending a woman accused of shooting a young girl who knocked on her front door late at night. Your client had heard about break-ins in the local area on the news and thought she was about to be robbed. The girl at the door was actually looking for help because her car had become stuck in a snowbank at the foot of your client's driveway. Based on these facts and any reasonable fact you can add to the scenario, how would you convince a jury that your client should not be convicted of shooting the young girl? Assume you are successful in your argument, and it appears that you have convinced a jury your client was in fear. If the fear needs to be a reasonable one, how would the prosecutor counter your argument most effectively?
To convince the jury that the client should not be convicted of shooting the young girl, I would argue that the client's actions were based on a reasonable fear for her safety given the circumstances, including the news of break-ins in the area and the late-night encounter with an unknown person at her front door.
In building the defense, I would emphasize the concept of reasonable fear and the client's subjective perception of the situation at the time. I would present evidence that demonstrates the client's genuine belief that she was about to be robbed, such as testimonies from neighbors, evidence of recent break-ins in the area, and news reports. By establishing the client's honest and reasonable fear, I would aim to evoke empathy from the jury, making them understand why she reacted the way she did.
However, the prosecutor may counter this argument by challenging the reasonableness of the client's fear. They could argue that the client should have taken additional steps to verify the situation before resorting to deadly force, such as calling the police or assessing the girl's demeanor.
The prosecutor may also highlight the lack of an immediate threat posed by the young girl and emphasize the tragic consequences of the client's actions. Ultimately, the effectiveness of the prosecutor's counterargument would depend on their ability to convince the jury that the client's fear was not reasonable given the specific circumstances of the case.
To know more about jury, refer here:
https://brainly.com/question/31832474#
#SPJ11
the path-goal theory of leadership, what are some strengths and weaknesses of this approach?
The Path-Goal Theory of leadership suggests that leaders should adapt their behavior based on the needs of their followers.
Strengths of the Path-Goal Theory:
1. Flexibility: The theory emphasizes the importance of leaders adapting their behavior to meet the specific needs of their followers and the situation.
2. Clarity and Direction: By clarifying goals, providing guidance, and removing obstacles, leaders can help followers understand their roles and tasks more clearly.
3. Employee Satisfaction: The theory focuses on enhancing follower satisfaction by addressing their needs and providing the necessary support.
Weaknesses of the Path-Goal Theory:
1. Complexity: The theory can be complex and challenging to implement in practice. It requires leaders to assess individual employee needs, adapt their leadership style accordingly, and continually monitor and adjust their behavior based on changing circumstances.
2. Limited Contextual Factors: While the theory recognizes the importance of situational factors, it may not adequately account for all the contextual variables that can influence leadership effectiveness.
3. Overemphasis on Leader's Role: The theory primarily focuses on the leader's behavior and actions, potentially neglecting the role of followers and their personal characteristics.
Learn more about Path-Goal Theory here:
https://brainly.com/question/30397152
#SPJ11
a manager of a rollercoaster wants to reduce to the time people are spending in line waiting for the ride. to speed up wait times she introduces a new loading procedure which should decrease the overall time in line. in order to make an accurate comparison she chooses the same times during the week to measure before and after the new procedure is introduce. did the new procedure lead to a reduction in wait time? test at
The manager should compare the wait times before and after applying the method throughout the same times of the week to see if the new loading technique resulted in a decrease in wait time.
Thus, the management can pinpoint the impact of the new technique on wait times by maintaining consistency among the factors, such as the day of the week and the time of day. It may be assumed that the method has resulted in a decrease in wait time if the wait times following the implementation of the new loading procedure are consistently shorter than the wait times before to.
The manager can assess whether the technique has improved wait times by carefully analyzing the wait times before and after the introduction of the new loading procedure.
Learn more about the wait times here:
https://brainly.com/question/30721800
#SPJ4
when the private rate of return on education is much higher than the social rate of return:
When the private rate of return on education is much higher than the social rate of return, it can result in a variety of social and economic consequences. In general, private rate of return refers to the benefits that an individual derives from an investment in education, while the social rate of return refers to the benefits that society as a whole derives from such an investment.
In many cases, the private rate of return on education is much higher than the social rate of return. This can happen for a variety of reasons, including differences in skills and abilities between individuals.
One of the most significant consequences of this disparity is that it can lead to a widening gap between rich and poor. Individuals who are able to invest in education and achieve high private rates of return are likely to accumulate wealth and social status over time, while those who are unable to invest in education are likely to struggle economically.
Another consequence is that it can lead to a misallocation of resources. When private rates of return are high and social rates of return are low, individuals may be encouraged to invest in education that is not necessarily beneficial to society as a whole.
Overall, it is important to recognize that education is not only a private good but also a public good. While individuals benefit from investing in education, society as a whole benefits from having an educated population. Policymakers should work to ensure that the private and social rates of return on education are aligned.
To know more about investment visit :
https://brainly.com/question/15105766
#SPJ11
price elasticity of supply is calculated the same as the price elasticity of demand, but using supply data instead of demand data.question 8 options:truefalse
The price elasticity of supply is calculated using the same formula as the price elasticity of demand, but with supply data instead of demand data. So, the statement is true.
The formula for price elasticity of supply is:
Price elasticity of supply (Es) = Percentage change in quantity supplied / Percentage change in price
Just like with the price elasticity of demand, the price elasticity of supply measures the responsiveness of suppliers to changes in price. It indicates how much the quantity supplied changes in response to a change in price.
If the price elasticity of supply is elastic (Es > 1), it means that suppliers are responsive to price changes, and the quantity supplied changes proportionately more than the change in price.
If the price elasticity of supply is inelastic (Es < 1), it means that suppliers are less responsive to price changes, and the quantity supplied changes proportionately less than the change in price.
Learn more about price elasticity https://brainly.com/question/30161342
#SPJ11
TRUE / FALSE. Sandbagging is a tactic used to develop a budget that is highly accurate and is grounded in research from marketing departments and field managers based on market conditions.
The given statement is false. Sandbagging is not a tactic used to develop a budget that is highly accurate and grounded in research from marketing departments and field managers based on market conditions.
Sandbagging is a tactic that refers to the practice of artificially reducing expectations or results in order to gain an advantage or achieve a more favorable outcome. This is often done in a business setting to make it easier to exceed expectations and appear more successful than anticipated.
Sandbagging can be accomplished through various means, such as understating revenue projections, downplaying the potential impact of new products or services, or setting low targets for sales or profits.
Overall, sandbagging is not a recommended practice in budget development, as it can lead to unrealistic expectations, misallocation of resources, and overall negative consequences for a business.
Rather, businesses should strive to develop budgets that are based on accurate data and research from relevant departments, as well as market conditions and trends. This will lead to more realistic expectations and better outcomes for the business.
For more question on revenue
https://brainly.com/question/28390284
#SPJ11
Operating Segments applies to: I. private companies II. listed entities III. entities in the process of listing IV. any entity who voluntarily chooses to apply it
Select one:
a. I, II and IV only
b. I, II and III only
c. II, III and IV only
d. I, III and IV only
Operating Segments applies to listed entities, entities in the process of listing, and any entity who voluntarily chooses to apply it. The correct answer is C: II, III, and IV only.
Operating Segments applies to listed entities, entities in the process of listing, and any entity who voluntarily chooses to apply it. Private companies are not required to apply Operating Segments.
Operating Segments is a standard issued by the International Accounting Standards Board (IASB). It requires entities to disclose information about their operating segments, products and services, the geographical areas in which they operate, and their major customers.
The standard is designed to help users of financial statements understand the nature and financial effects of the different business activities in which an entity engages and the different economic environments in which it operates.
The standard applies to all entities that have publicly traded securities. This includes listed entities, entities in the process of listing, and any entity who voluntarily chooses to apply it.
Private companies are not required to apply Operating Segments. Therefore, the correct option is C, II, III and IV only.
To know more about Operating Segments, refer here:
https://brainly.com/question/32381785#
#SPJ11
Describe why marginal revenue is always less than price for a monopolist.
Marginal revenue is defined as the increase in total revenue resulting from a one-unit increase in output.
A monopolist, on the other hand, is a market participant who has the ability to influence prices by adjusting the amount of output supplied. Marginal revenue is always less than price for a monopolist because the latter has control over the market and can, therefore, charge a higher price for their products.
:In a monopoly, the monopolist has complete control over the price at which he sells his goods.
As a result, they can increase their product's price by lowering their output. This is why the marginal revenue curve for a monopolist is downward sloping, as opposed to the horizontal MR curve of a perfect competition firm.
Learn more about marginal revenue at:
https://brainly.com/question/30359792
#SPJ11
Exercise 3-1 (Algo) Determining when to recognize revenue LO C1 For each of the following separate situations, determine how much revenue is recognized in December (using accrual basis accounting). a. On December 7, Oklahoma City Thunder sold a $92 ticket to a basketball game to be played in March. b. Tesla sold and delivered a $60,000 car on December 25. The customer will not pay until February. c. Deloitte signs a contract on December 1 to provide 40 days of advisory services with receipt of $12,000 due at the end of the contract. On December 31, 75% of the services have been completed.
a. Revenue recognized in December for the ticket sale: $0. b. Revenue recognized in December for the car sale: $60,000. c. Revenue recognized in December for the advisory services: $9,000
a. On December 7, Oklahoma City Thunder sold a $92 ticket to a basketball game to be played in March.
Revenue recognition principle states that revenue should be recognized when it is earned and the performance obligation is satisfied. In this case, the basketball game has not been played yet, and the performance obligation will be satisfied in March. Therefore, no revenue is recognized in December for this transaction.
b. Tesla sold and delivered a $60,000 car on December 25. The customer will not pay until February.
Revenue recognition principle states that revenue should be recognized when the performance obligation is satisfied. In this case, Tesla has delivered the car to the customer, which satisfies the performance obligation. Regardless of the timing of payment, revenue is recognized when the car is delivered. Therefore, $60,000 revenue is recognized in December.
c. Deloitte signs a contract on December 1 to provide 40 days of advisory services with receipt of $12,000 due at the end of the contract. On December 31, 75% of the services have been completed.
Revenue recognition principle states that revenue should be recognized as the performance obligation is satisfied. In this case, 75% of the advisory services have been completed by December 31, indicating that a portion of the performance obligation has been fulfilled. Therefore, 75% of the contract value is recognized as revenue in December: 75% * $12,000 = $9,000.
To know more about revenue click here
brainly.com/question/28558536
#SPJ11
Saved a. Option cost b. Total cost c. Profit d. Loss Help Save & Exit Submit Suppose you purchase the July 2020 put option on corn futures $3.10. Assume your purchase was at the last price. Use Table
a. Option cost: $3.10
b. Total cost: It depends on the number of contracts purchased. To calculate the total cost, multiply the option cost by the number of contracts.
The option cost is given as $3.10, which represents the price paid for a single corn futures put option. To calculate the total cost, you need to know the number of contracts purchased. If you bought multiple contracts, you would multiply the option cost by the number of contracts to get the total cost.
For example, if you purchased 10 contracts, the total cost would be $3.10 * 10 = $31.00. The total cost represents the amount of money spent on purchasing the put options.
For more questions like Cost click the link below:
https://brainly.com/question/30045916
#SPJ11
QUICK PLEASE THERE IS NO
TIME
estion 10 The beginning balance in retained earnings of is $1200,000 (Cr). The current period not lous is $350,000 and declared shock didends $150,008 The ending balance OA Credit of $1400,000 OB Cred
The correct ending balance of retained earnings, as determined by considering the beginning balance, net loss, and declared dividends, is[tex]\$\ 2400,000[/tex] (Cr).
The ending balance of retained earnings can be determined by considering the provided information. With a beginning balance of $[tex]1200,000[/tex](Cr), a current period net loss of $[tex]350,000[/tex], and declared shock dividends of $[tex]150,008[/tex], the correct option is A: Credit of $[tex]1400,000[/tex]. To calculate the ending balance, we subtract the losses and dividends from the beginning balance. This results in a balance of $[tex]700,992[/tex]. However, since the beginning balance is a credit, we need to add the difference between the beginning and ending balances, arriving at an ending balance of $[tex]2400,000[/tex](Cr). Therefore, option A aligns with the calculated ending balance of retained earnings.Hence, the correct ending balance of retained earnings, as determined by considering the beginning balance, net loss, and declared dividends, is $[tex]2400,000[/tex] (Cr), indicating an increase in retained earnings. This balance ensures accurate financial reporting and reflects the impact of the company's performance on its retained earnings account.
For more such questions on ending balance:
https://brainly.com/question/29406151
#SPJ11
Integrative-Optimal capital structure The board of directors of Morales Publishing, Inc., has commissioned a capital structure study. The company has total assets of $39,300,000. It has earnings before interest and taxes of $8,040,000 and is taxed at a rate of 22%. a. Create a spreadsheet showing values of debt and equity as well as the total number of shares, assuming a book value of $25 per share. b. Given the before-tax cost of debt at various levels of indebtedness, calculate the yearly interest expenses. c. Using EBIT of $8,040,000, a 22% tax rate, and the information developed in parts (a) and (b), calculate the most likely earnings per share for the firm at various levels of indebtedness. Mark the level of indebtedness that maximizes EPS. d. Using the EPS developed in part (c), the estimates of required return, and the equation Po=EPS/rs, estimate the value per share at various levels of indebtedness. Mark the level of indebtedness in the following table that results in the maximum price per share, Po e. Prepare a recommendation to the board of directors of Morales Publishing that specifies the degree of indebtedness that will accomplish the firm's goal of optimizing shareholder wealth. Use your findings in parts (a) through (d) to justify your recommendation. C
To determine the integrative-optimal capital structure recommendation for Morales Publishing, Inc., we need to consider several factors such as the cost of debt, the cost of equity, and the overall financial risk of the company.
We should evaluate the potential benefits and drawbacks of different capital structure alternatives. Without specific information regarding the company's current capital structure, market conditions, and industry dynamics, it is challenging to provide an accurate recommendation. It is recommended for Morales Publishing, Inc. to consult with financial professionals or engage in a comprehensive capital structure study to determine the optimal mix of debt and equity financing that aligns with their specific business goals, risk tolerance, and market conditions.
To know more about capital structure, here
brainly.com/question/32095838
#SPJ4
--The complete question is, What would be the integrative-optimal capital structure recommendation for Morales Publishing, Inc., considering its total assets of $39,300,000, earnings before interest and taxes of $8,040,000, and a tax rate of 22%?--
Which statement is incorrect with regard to the tuition amount?
The tuition amount can be carried forward by the student indefinitely.
If the student has no taxes payable, (s)he can opt to have the excess tuition amount refunded by filing a tax return.
The student's taxes payable must be reduced to zero before the tuition amount can be transferred.
The tuition amount is ony available for post-secondary education at a qualifying institution.
The statement "The tuition amount can be carried forward by the student indefinitely" is incorrect.
The tuition amount can be carried forward by the student, but there is a limit to the number of years it can be carried forward. In most jurisdictions, the tuition amount can be carried forward for a certain number of years, typically five years, before it expires. After this time, any unused tuition amount is no longer available for carry forward. Therefore, it cannot be carried forward indefinitely.
It's important for students to be aware of the specific rules and limitations regarding the carry forward of tuition amounts in their jurisdiction.
For more questions like Tuition amount click the link below:
https://brainly.com/question/15526289
#SPJ11
The Long-haul Truckers Association wants the federal government to spend funds to build a new highway. Congress can spend revenues:
a. only to carry out its enumerated powers.
b. to promote any objective that it deems worthwhile.
c. as long as the funds are spent uniformly among the states.
d. without regard to whether the expense violates the Constitution.
The Long-haul Truckers Association wants the federal government to spend funds to build a new highway. Congress can spend revenues: b. to promote any objective that it deems worthwhile.
According to option b, Congress can spend revenues to promote any objective that it deems worthwhile. This means that Congress has the authority to allocate funds towards various initiatives and projects, including infrastructure development such as building a new highway.
Unlike option a, which limits spending to carry out enumerated powers, option b provides Congress with flexibility to pursue objectives beyond its specific constitutional powers. However, it is important to note that Congress still operates within certain constraints, such as legal and budgetary limitations.
While Congress has the discretion to determine which objectives are worthwhile, it must still adhere to constitutional principles and laws. Additionally, Congress is responsible for ensuring that funds are spent in a manner that aligns with public interest and serves the needs of the nation as a whole.
To know more about limitations visit-
brainly.com/question/32585379
#SPJ11