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1 year ago

The main reason for considering nonconstant growth in dividends is to allow for _ growth rates over _.

1 answer:

7 0

Based on the economic and financial analysis, the main reason for considering nonconstant growth in dividends is to allow for "Supernormal" growth rates over "some finite length of time."

This is because, in nonconstant growth, the growth rate cannot surpass the mandatory return indefinitely.

However, there is the probability that it could do so for some number of years.

Also, it should be noted that in this situation, the value of the stock equates to the present value of all the future dividends.

Hence, in this case, it is concluded that the correct answer is supernormal and some finite length of time.

Learn more here: brainly.com/question/13223703

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A monopolistic competitive firm is currently charging a price of $10 and producing 12,000 units/month. It faces monthly fixed co

gizmo_the_mogwai [7]

Answer:

either the selling price decreases or the total output decreases

Explanation:

The firm's income statement:

total sales revenue = $120,000

minus total variable costs = ($72,000)

minus total fixed costs = ($15,000)

net profit = $33,000

The long run equilibrium for a monopolistically competitive firm occurs when the firm is making no economic profit since it is charging a price = average total cost.

In this case the average total cost per unit = $6 per unit + ($15,000 / 12,000 units) = $7.25 per unit

Since the firm is currently charging a higher selling price than average total cost ($10 > $7.25), one or two things might happen in the long run:

selling price will decrease
output will decrease

5 0

2 years ago

Blue Ridge Bicycles uses a standard part in the manufacture of several of its bikes. The cost of producing 45,000 parts is $14

Morgarella [4.7K]

Answer:

$2.07 per unit

Explanation:

Currently 45,000 units produced

total cost= $72,000 (variable) + $70,000 (fixed) = $142,000

average total cost per unit = $142,000 / 45,000 units = $3.16 per unit

if the company outsources the production of the part:

total cost = $72,000 + ($70,000 x 30%) = $72,000 + $21,000 = $93,000

average total cost per unit = $93,000 / 45,000 units = $2.07 per unit

if Blue Ridge spends more than $2.07 per unit, it will be spending more money by outsourcing the part than by producing it.

e.g. $2.10 per unit

total costs = ($2.10 x 45,000) + ($70,000 x 70%) = $94,500 + $49,000 = $143,500 which is higher than $142,000.

3 0

2 years ago

Which of the following is an example of competing on quick response?A) A firm produces its product with less raw material waste

finlep [7]

Answer:

C) A firm's products are introduced into the market faster than its competitors' products.

Explanation:

Quick response refers to shorten the delivery time of products and services to meet the need of customers at the right moment. This is a way to survive the competition and increase the customer satisfaction. According to this, an example of competing on quick response wil be that a firm's products are introduced into the market faster than its competitors' products as the firm will be having a better delivery time than the competition which will allow it to put the goods first in the market which will give it an advantage by being first.

4 0

2 years ago

If the price of a slice of pizza rises from $2.50 to $3, and quantity demanded falls from 10,000 slices to 7,400 slices, using t

GenaCL600 [577]

Answer:

Explanation:

Initial quantity of pizzas demanded = 10,000 slices

New quantity of pizzas demanded = 7,400 slices

Change in quantity of pizzas demanded = new quantity demanded - initial quantity demanded = 7,400 - 10,000 = -2,600 slices

Percentage change in quantity demanded = (change in quantity of pizzas demanded ÷ initial quantity of pizzas demanded) × 100 = (-2600 ÷ 10,000) × 100 = -0.26 × 100 = -26%

8 0

1 year ago

Eric's income increased from $40,000 to $50,000 per year. Eric's consumption of tickets to pro football games increased from two

ira [324]

Answer:

By the midpoint formula, his income elasticity of demand for pro football game tickets is equal to +3, and football game tickets are normal goods.

Explanation:

The formula for calculating income elasticity of demand using the midpoint method is:

income elasticity of demand = {change in quantity demanded / [(old quantity + new quantity) / 2]} / {change in income / [(old income + new income) / 2]}

= {2 / [(2 + 4) / 2]} / {10,000 / [(40,000 + 50,000) / 2]} = (2 / 3) / (10,000 / 45,000) = 0.67 / 0.222 = 3

when the income elasticity of demand is higher than 1, the goods are normal goods.

6 0

1 year ago

The main reason for considering nonconstant growth in dividends is to allow for _____ growth rates over _____.

The main reason for considering nonconstant growth in dividends is to allow for _ growth rates over _.