Bunkhouse Electronics is a recently incorporated firm that makes electronic entertainment systems. Its earnings and dividends have been growing at a rate of 30%, and the current dividend yield is 2%. Its beta is 1.2, the market risk premium is 8%, and the risk-free rate is 4%. (LO13-4) a. Use the CAPM to estimate the firm’s cost of equity. b. Now use the constant growth model to estimate the cost of equity. c. Which of the two estimates is more reasonable?

Answers

Answer 1

Answer:

a. 13.60 %

b. 10.00 %

c. CAPM accounts for investment risk and can be applied by any company irregardless of dividend size or growth rate.

Explanation:

Cost of Equity is the return required by holders of Common Stock

1. CAPM

Cost of Equity = Expected Return on Risk Free Security + Company`s Beta × Market Risk Premium

                       = 0.04 + 1.20 × 0.08

                       = 13.60 %

2. Constant growth model

Cost of Equity = Current Dividend Yield + Expected Growth

                        = 2 % + 8 %

                        = 10.00 %


Related Questions

If the current one year zero coupon bond yield is 4% and the current two year zero coupon bond yield is 3%, then what do investors expect about the one year zero coupon bond yield next year if the expectations hypothesis is true?

Answers

Answer:

A. They expect next year's one year yield to be roughly 2%

Explanation:

Since in the question it is mentioned that if the current one year, the yield of a zero-coupon bond is 4% and the current two years, the yield of a zero-coupon bond is 3% so for the one year it would be 2% approx as it reduced one percentage i.e 1% every one

Therefore in the given case, the correct option is A.

The free rider problem is a situation in which A. one agent secures benefits that others pay for B. all of the above. C. none of the above. D. there are excessive subsidies given to polluting buses or other forms of mass transit E. Effluents such as CFCs combine with ozone and decrease concentrations of that protective chemical F. perfect property rights exits

Answers

Answer:

b).  one agent secures benefits that others pay for.

Explanation:

The free-rider problem is described as the problem when some individuals consume or take the benefit of a resource without paying for it. in this problem, one agent is being benefitted from the resources that the others are paying for. This creates a load on a shared resource and eventually causes market failure. In order to cope with this problem, the organizations must ensure a fair distribution of resources and their benefits as per the payment made by the agents. Therefore, option B is the correct answer.

In the context of a production process such as a manufacturing plant, what is the technique used to identify all of the value-adding as well as non-value-adding processes that materials are subjected to within a plant, from raw material coming into the plant through delivery to the customer?

Answers

Answer: Value stream mapping

Explanation:

Value stream map is a visual representation of the steps that were taken in a process from the start of the process till the moment it gets to the customer.

The technique is used in the identificstion of all of the value-adding as well as non-value-adding processes that materials are subjected to within a plant, from raw material coming into the plant through delivery to the customer.

The PIO’s primary responsibility to organizational leadership as an advisor is to: A. Be an intermediary between leadership and the news media B. Assess situations for public information implications C. Develop relationships with other organizations’ PIOs D. Set up interviews and write talking points

Answers

Answer:

Correct answer:

D. Set up interviews and write talking points

Explanation:

The PIO's primary responsibility to organizational leadership as an advisor is to assist agency leadership to ensure that the mission and goals of the agency are achieved. This could be achieved through series of actions like setting up of interviews, or jotting down important points.

Considering the available options, the PIO’s primary responsibility to organizational leadership as an advisor is to " Be an intermediary between leadership and the news media."

Who is a PIO?

PIO is the acronym for Public Information Officer. The role of a PIO is to ensure there is clear communication between the government or leaders and the citizens or followers.

Given that PIO serves as an intermediary between the government and the people in terms of communication, it is concluded that they serve as an intermediary between leadership and the news media.

Hence, in this case, it is concluded that the correct answer is option A.

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Name some eco-friendly features you might look for while shopping for your first vehicle
Also, explain techniques you can use while driving any vehicle to increase fuel efficiency and reduce emissions it’s for my ed class

Answers

Answer

Some Eco friendly features you might look for may include a gas efficiency button to regulate between gas and electric motors thus decreasing emissions. another great pointer is LED lights instead of older bulb lights, Most pivotal idea in buying the most Eco friendly car would have to be the weight most definitely, the lighter the vehicle the less environmental impact.

Marcus prepared for his upcoming interview by wearing a navy suit, dress shoes, a white shirt, and a patterned tie. He also practiced answering possible interview questions. Marcus was ___________.

Answers

Options :

A. Prepared: made ready in advance

B. Fortified: strengthened and secured

C. Qualified: having the required skills

D. Trained: having acquired necessary knowledge or skill

Answer: A. Prepared: made ready in advance

Explanation: Preparedness may be explained as a measure of an individual's state of readiness with respect to an imminent assignment, action or chore. Being prepared could involve physical readiness such as in the case of Marcus donned the attire he intends to use for his upcoming interview before the interview date, this will help him access is physical state in the outfit prior to the main event. Also, Marcus exhibited mental Preparedness by practicing possible interview questions in other to boost his knowledge and mental state. This shows that Marcus was fully ready before the main interview.

Felix launched both a Google Search Ad campaign and a Google Display Ad campaign to drive sales of tools on his home improvement website. He reviewed his sales data after two weeks and noticed his Search Ad campaign is the most successful. Which optimization type should Felix use if he wants to use bidding or targeting to acquire more customers?

Answers

Complete Question:

Felix launched both a Google Search Ad campaign and a Google Display Ad campaign to drive sales of tools on his home improvement website. He reviewed his sales data after two weeks and noticed his Search Ad campaign is the most successful. Which optimization type should Felix use if he wants to use bidding or targeting to acquire more customers?

Group of answer choices.

A. Channel

B. Media Mix

C. Attribution

D. Placements

Answer:

A. Channel.

Explanation:

In this scenario, Felix launched both a Google Search Ad campaign and a Google Display Ad campaign to drive sales of tools on his home improvement website. He reviewed his sales data after two weeks and noticed his Search Ad campaign is the most successful. The optimization type Felix should use if he wants to use bidding or targeting to acquire more customers is channel.

A Google Search Ad campaign involves changing the way or manner in which Ads are delivered to potential viewers (visitors) within a specific channel so as to boost a business. Basically, there are three (3) main types of channel optimization used in the Google Search Ad campaign and these are;

1. Bidding: it is used to get more customers by adjusting bids with respect to a comprehensive set of auction-time signals which targets your adverts.

2. Creative: it involves customizing assets to give or display the right and necessary information to the right customer at the right time.

3. Targeting: it involves the process of reaching the individuals or customers who are very much interested in your business through the dynamic and broad audience targeting.

Once a corrective action plan begins addressing non-compliance for fraud, waste, and abuse (FWA) committed by a Sponsorâs employee or first-tier, downstream, or related entities (FDRs) employee, ongoing monitoring of the corrective actions is not necessary.

a. True
b. False

Answers

Answer:

False

Explanation:

The reason is that the ongoing monitoring is an essential part of implementation action plans because it enables us to highlight issues with the execution of plan. This helps us to layout plans to eradicate these issues and ensure effective running of action plan. Hence the statement which says that the ongoing monitoring is not necessary once the action plan begins is totally wrong.

Shannon and Rene are sisters who enter into a contract to buy an income property. The sisters get into a dispute, and Shannon wants out of the deal. However, their uncle Jerry wants to replace Shannon on the contract. Shannon agrees to the substitution so they go ahead and do it. This is an example of ________.

Answers

Answer:

Novation.

Explanation:

In this scenario, Shannon and Rene are sisters who enter into a contract to buy an income property. The sisters get into a dispute, and Shannon wants out of the deal. However, their uncle Jerry wants to replace Shannon on the contract. Shannon agrees to the substitution so they go ahead and do it. This is an example of novation.

Novation can be defined as the process or an act of legally replacing a party in a contract with another, adding an obligation to engage or replacing a contractual obligation to perform with another based on the consent of all involved parties.

The condition where Shannon wishes to get out of the deal and Jerry is replacing Shannon to a contract with Rene, such a contract is referred to as a contract by novation.

A novation contract is dependent on the willingness of both the parties  for such replacement as a matter that only the person will replace another and the conditions of the contract do not change.

A contract by novation refers to replacement of undertaking the liabilities and benefits of an already entered contract by one or more person with respect to contract being valid.

An illegal contract created without the knowledge of such person who replaces the concerned person for the benefits and liabilities will constitute as a contract viod ab initio

The person who replaces the concerned person will have the sole responsibility of the conditions arising out of entering such contract and hence there will be a direct and unlimited liability.

Hence, the correct statement will be that Jerry will be responsible for the benefits and liabilities arising out of such contract which will be shared by Rene as it is a contract by novation.

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Rovinsky Corporation, a company that produces and sells a single product, has provided its contribution format income statement for November. Sales (7,300 units) $ 350,400 Variable expenses 204,400 Contribution margin 146,000 Fixed expenses 103,500 Net operating income $ 42,500 If the company sells 7,200 units, its net operating income should be closest to:

Answers

Answer:

Net operating income= 40,500

Explanation:

Giving the following information:

Contribution margin 146,000

Fixed expenses 103,500

Sales= 7,200

First, we need to calculate the unitary contribution margin:

Unitary contribution margin= 146,000/7,300= $20

Now, for 7,200:

Total contribution margin= 7,200*20= 144,000

Fixed costs= (103,500)

Net operating income= 40,500

Vasudevan Inc. recently reported operating income of $2.90 million, depreciation of $1.20 million, and had a tax rate of 40%. The firm's expenditures on fixed assets and net operating working capital totaled $0.6 million. How much was its free cash flow, in millions?

Answers

Answer:

2.34 million

Explanation:

Vasudevan incorporation reported an operating income of $2.90 million

The depreciation is $1.20 million

The tax rate is 40%

= 40/100

= 0.4

The firm's expenditure on fixed assets and net operating working capital is $0.6 million

Therefore, the free cash flow can be calculated as follows

Free cash flow= operating profit-tax+depreciation-expenditure

= 2.90-(2.90×0.4)+1.20-0.6

= 2.90-1.16+1.20-0.6

= 2.34

Hence the free cash flow is 2.34 million

All the following statements concerning term insurance are correct EXCEPT: Group of answer choices Most policies can be renewed for additional periods without evidence of insurability. Most policies can be converted to a permanent life insurance policy. Most policies have a nonforfeiture benefit to refund a portion of a policy's cash value when coverage stops. The insurance provides protection for a certain period of time.

Answers

Answer: Most policies have a nonforfeiture benefit to refund a portion of a policy's cash value when coverage stops.

Explanation:

Term insurance is a type of life insurance policy whereby the policy owner will be given coverage for a particular time period.

It should be noted that term insurance can be renewed for additional periods without evidence of insurability and can also be converted to a permanent life insurance policy.

The option that most policies have a nonforfeiture benefit to refund a portion of a policy's cash value when coverage stops is not true.

All of the following are excellent reasons for a municipality to subsidize stadium/arena construction except A. improved quality of life and the possibility for urban renewal. B. economic growth leading to a return on investment. C. public relations boost of being labeled a "major league city." D. civic pride and community spirit.

Answers

Answer:

B. economic growth leading to a return on investment.

Explanation:

All of the following are excellent reasons for a municipality to subsidize stadium/arena construction except economic growth leading to a return on investment. Thus the correct option is B.

What is economic growth ?

The economic growth of any country is determined by the ratio of production and consumption that takes place within a year and evaluates the flow of funds in the market by analyzing the purchasing parity of an individual.

The excellent reasons for a municipality to subsidize stadium/arena construction are improved quality of life and the possibility for urban renewal which provides better assistance and job opportunities.

Subsidize stadium/arena construction helps in the improvement in public relations and appears as a "major league city" which helps in growth and development as well as community spirit.

Therefore, option B's economic growth leading to a return on investment is appropriate.

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______is a corporate-level strategy that emphasizes re-investing a company's profits in strengthening its competitive position in its current industry. A. Concentration on a single industry.B. Forward vertical integration.C. Diversification.D. Backward vertical integration.E. International expansion.

Answers

Answer:

A. Concentration on a single industry

Explanation:

The concentration strategy refers to the strategy in which the company wants to compete successfully handling a single industry. The company focused on a single product or the single market in this type of strategy

Here in the given situation, the reinvesting a company profits to strengthen the competitive position in the current industry represents the concentration on a single industry

Hence, the correct option is A.

"If a customer calls his registered representative and states the following: "I just got my account statement and I see that your recommendations have lost 15% in value. Clearly, you have made unsuitable recommendations and you will be hearing from my attorney." Which statement is TRUE under FINRA rules regarding how the representative should handle this?"

Answers

Answer:

The representative does not need to take any actions

Explanation:

The representative should not take any actions yet because the customer has not made his complaints in writing. Under FINRA, a customer's complaint is defined as one received by the company in writing through mail(hand written)or electronic mail(email). The financial regulatory authority abbreviated FINRA is a self regulatory organization and non governmental organization in the US that makes and enforces rules and best practices that govern brokerage/security/broker-dealer firms and safeguard the public against fraud and malpractices that might emanate from such firms.

Originally, filters for Mr. Coffee electric-drip coffeemakers were sold through appliance and mass merchandise stores. If the company decided to sell the filters in grocery stores where customers purchased their coffee, what type of intermediaries would the company most likely hire

Answers

Answer: Food brokers

Explanation: Food brokers may also be regarded as a type of sales agent who negotiates product sales from manufacturers and sells to consumers including wholesale resselllers, retailers chain or independent suppliers. However, in the case of food brokers, they own their businesses and have pool of clients. When Producers sell though food brokers, they do not have to start sourcing for markets as this is handled by the food brokers who works with both the producer and the wholesale outlets thereby eliminating the need for producers to start sourcing for market to see their products.

Assume that three identical units are purchased separately on the following three dates and at the respective costs:________. June 1 at $10 June 2 at $15 July 4 at $20 The company sells two units during the period. Conclude which inventory items are sold first and which unit remains in ending inventory if the company is using the LIFO perpetual cost flow assumption.

Answers

Answer:

Under last in, first out (LIFO) inventory method, the units purchased last are used to determine the cost of goods sold. This doesn't mean that exactly the last units purchased will be sold first, it is just used as an accounting tool.

In this case, the last unit purchased costed $20, and the immediately previous one costed $15. Under LIFO, these 2 units would have been sold (COGS = $35), and the ending inventory = $10 (the price of the "oldest" unit).

All of the following statements regarding technical analysis are correct except A) technical analysts use terms such as trendline, support, and resistance in analyzing stocks. B) technical analysts rely on charts to predict the future prices of stocks. C) technical analysts rely heavily on financial ratios in their analysis of stocks. D) technical analysts attempt to predict the future movement of stock prices based on past trends.

Answers

Answer:

C

Explanation:

Technical analysis is a trading tool used to evaluate investment and trading opportunities by gathering and analyzing trends from trading activities , thereby it is able to predict future prices of stocks based on past trends.

The analyst does not rely on financial ratios in the analysis of stocks as financial ratio is mostly used by fundamental analyst in financial performance evaluation and not by technical analysts in predicting changes in stock movements

Under the NASAA model custody rule, an investment adviser would be considered to have custody of client assets if that adviser inadvertently receives:
i. a check from a client from a client made out to the IA and does not return the check within 24 hours
ii. a check from a client made out to a third party and Does not forward the check within 3 business days
iii. stock certificates from a client and does not forward them within 3 business days
iv. stock certificates from a client and does noT return them within 3 business days

Answers

Answer:

(ii) A check from a client made out to a third party and does not forward the check within 3 business days .

(iv) Stock certificates from a client and does not return them within 3 business days.

Explanation:

As per the NASAA model custody rule, the investment advisor will have the custody of the assets of the client an associated person only if the adviser accidentally receives ' a check has been made by the client to the third party but it is not forwarded within three business days' and when 'the certificates of stocks from the client not returned to them within three business days.' Thus, these indirect documents make the adviser eligible to have custody of client's possessions. Thus, the options ii and iv are the correct answers.

Arbitrageurs may be unable to exploit behavioral biases due to I) fundamental risk. II) implementation costs. III) model risk. IV) conservatism. V) regret avoidance.

Answers

Answer: I, II, and III

Explanation: Arbitrageur is one who engages in arbitrage ( a market activity in which security, commodity, currency, or other tradable item is bought in one market and sold simultaneously in another, in order to profit from the price differences between the markets), such as a financial broker, or an investment bank. Arbitrageurs may be unable to exploit behavioral biases due to fundamental risk, implementation costs, and model risk.

A company can be said to have competitive advantage if: Select one: a. It has a different value chain than rivals b. It has some type of edge over rivals in attracting customers and coping with competitive forces c. It earns the largest profit in the industry d. It has more resource strengths than weaknesses

Answers

Answer:

b. It has some type of edge over rivals in attracting customers and coping with competitive forces

Explanation:

A firm can have competitive advantage if it produces at a lower cost than its competitors and thus the firms' goods are priced lower and this attracts customers.

a firm can also have a competitive advantage if the quality of its own good is higher than that of its competitors and this increases patronage for the firms goods.

Edwards Manufacturing Company purchases two component parts from three different suppliers. The suppliers have limited capacity, and no one supplier can meet all the company’s needs. In addition, the suppliers charge different prices for the components. Component price data (in price per unit) are as follows: Supplier Component 1 2 3 1 $10 $15 $14 2 $13 $12 $10 Each supplier has a limited capacity in terms of the total number of components it can supply. However, as long as Edwards provides sufficient advance orders, each supplier can devote its capacity to component 1, component 2, or any combination of the two components, if the total number of units ordered is within its capacity. Supplier capacities are as follows. Supplier 1 2 3 Capacity 1500 2500 2000 If the Edwards production plan for the next period includes 2,000 units of component 1 and 3,000 units of component 2, what purchases do you recommend

Answers

Answer:

Purchase 1,500 units of component 1 from supplier 1.

Purchase 2,000 units of component 2 from supplier 3.

Purchase 500 units of component 1 and 1,000 units of component 2 from supplier 2.

Total costs = $54,500

Explanation:

                                       component 1                      component 2

supplier                   1              2             3              1              2             3  

price                       $10        $15          $14           $13        $12          $10

capacity:

supplier 1 = 1,500

supplier 2 = 2,500

supplier 3 = 2,000  

demand:                            

component 1 = 2,000component 2 = 3,000

There are two ways to solve this, one using excel and the solver function or do it manually.

Manually, we must start with the supplier that has the lowest cost. In this case, the supplier with the lowest cost for component 1 is supplier 1 ($10) and component 2 is supplier 3 ($10).

We will start by purchasing 1,500 units of component 1 from supplier 1 at $15,000. That eliminates supplier 1's capacity, so we now only have suppliers 2 and 3. We still need 500 units of component 1 and 3,000 units of component 2.

We purchase 2,000 units of component 2 from supplier 3 at $20,000. This will consume all of supplier 3's capacity, so we only have supplier 2 left. We are still needing 500 units of component 1 and 1,000 units of component 2.

We will purchase the remaining units from supplier 3 at (500 x $15) + ($1,000 x $12) = $19,500.

Our total expense will be $54,500.

imothy, a laboratory manager at a multinational photography company, manages a team of seven designers. All of them report to him, and he has the power to command them and assign duties to them. In this scenario, Timothy most likely has_____.

Answers

Answer:

line authority

Explanation:

Line authority can be defined authority or power given to an individual in a supervisory role to manage and mandate his subordinates to help an organization fulfil its objectives.

From the above definition, it is seen that Timothy has a group of 7 persons under him which means he is in a supervisory role or position within the company. As the supervisor, Timothy assigns duties to the members of the group after which he reports to a higher authority.

Cheers.

The ________ is a job analysis method that depends on a panel of experts to determine the standards that need to be met by an ideal worker.

Answers

Answer:

Panel of experts

Explanation:

For analyzing the job in the correct way, the expert panels are equally important. Expert in this mean who has perfect in his or her area or specialization that contains sufficient knowledge and skills

Different jobs have different experts that are required time to time

Its motive is to analyze the job in a correct and right way

Also, it determines that the standards of an organization are met or not by an ideal worker

The management of Cooper Corporation is considering the purchase of a new machine costing $420,000. The company's desired rate of return is 10%. The present value factors for $1 at compound interest of 10% for 1 through 5 years are 0. 909, 0. 826, 0. 751, 0. 683, 0. 621, respectively. In addition to this information, use the following data in determining the acceptability in this situation: Year Income from Operations Net Cash Flow 1 $100,000 $180,000 2 40,000 120,000 3 20,000 100,000 4 10,000 90,000 5 10,000 90,000 The present value index for this investment is a.1.45. b.1.08. c.0.92. d.0.36.

Answers

Answer:

b.1.08.

Explanation:

The computation of the present value index is shown below;

As we know that

Present Value Index = Present value of Net Cash Inflow ÷ Initial Cash outflow

where,

Initial investment = $420,000

And, the present value of net cash inflows are

Year        Cash Flow (in $)       PVF at 10%            Present Value (in $)

1               180,000                   0.909                     163,620

2              120,000                   0.826                      99,120

3               100,000                  0.751                        75,100

4                90,000                   0.683                      61,470

5                90,000                   0.621                       55,890

TOTAL                                                                       455,200

So, the present value index is

= $455,200 ÷ $420,000

= 1.08

Studies on a machine that molds plastic water pipe indicate that when it is injecting 1-inch-diameter pipe, the process standard deviation is 0.05 inches. The 1-inch pipe has a specification of 1 inch plus or minus 0.10 inch. What is the process capability index ( Cpk) if the long-run process mean is 1 inch?

Answers

Answer:

0.67

Explanation:

Given the following :

Process standard deviation(sd) = 0.05

Mean (m) = 1

specification of 1 inch plus or minus 0.10 inch

Upper specification limit(USL) = 1 + 0.1 = 1.1

Lower specification limit (LSL) = 1 - 0.1 =. 0.9

Cpk = min [[(m - USL) / 3(sd)], [(m - LSL) / 3(sd)]]

Cpk = min [[(1 - 1.1)/3(0.05)], [(1-0.9)/3(0.05)]]

Cpk = min[ -0.1/0.15], [ 0.1 / 0.15]

Cpk = min(-0.67, 0.67)

All the following statements concerning variable life insurance are correct EXCEPT: Group of answer choices The policyowner can invest the cash value in different investment accounts. The premium is level and guaranteed not to increase. The death benefit can vary with the policy's investment experience. Cash surrender values are guaranteed.

Answers

Answer:

D. Cash surrender values are guaranteed.

Explanation:

Variable Life Insurance is an insurance policy that requires a specific amount of the premium paid by the insurance holder to be dedicated to the investment funds and assets of the company offering the insurance policy. It is important to know that

1.  there is a cash value account that can be invested in different subaccounts in this type of policy.  

2. The premium level is fixed and the policyholder is expected to pay it on a regular basis. He can be assured that the premium level will not increase.

3. A death benefit is also guaranteed to be paid to a beneficiary chosen by the policyholder, but the amount to be paid as the death benefit depends on how good or bad the policy's investment performed.

But then it is important to note that the cash surrender values are not guaranteed because there is a risk factor. They can fluctuate depending on whether the policy performed poorly or excellently.

Hayduke Corporation reported the following results from the sale of 5,000 units in May: sales $300,000, variable costs $180,000, fixed costs $90,000, and net income $30,000. Assume that Hayduke increases the selling price by 5% on June 1. How many units will have to be sold in June to maintain the same level of net income?

Answers

Answer:

4,444.44 units

Explanation:

For the computation of Number of units to be sold to earn target profit first we need to follow some steps which are shown below:-

Selling price per unit = Sales ÷ Number of units sold

= $300,000 ÷ 5,000

= $60

Variable cost per unit = Total variable cost ÷ Number of units sold

= $180,000 ÷ 5,000

= $36

Increase in selling price = $60 × 5%

= $3

New selling price per unit = $60 + $3

= $63

New contribution margin per unit = New selling price per unit - Variable cost per unit

= $63 - $36

= $27

Number of units to be sold to earn target profit = (Fixed cost + Target profit) ÷ Contribution margin per unit

= ($90,000 + $30,000) ÷ $27

= $120,000 ÷ $27

= 4,444.44 units

It was the third meeting, but the group had finally agreed on the roles for each member. Cathy felt good about how things were progressing. It seemed that the conflicts had been resolved; Bella and Lewis had actually arrived on time with their tasks completed. Cathy felt they were now a team. They were now in the ________ stage.

Answers

Answer: norming

Explanation:

The third stage of a group development model is regarded to as the norming stage. The norming stage is the stage whereby members or teammates start appreciating the strengths that are possessed by each other in the team.

At this stage, there is resolution of conflicts and establishment of leadership positions. Here, everyone is happy with their roles.

If the elasticity of demand for spring break packages to cancun is -5 , and if you notice that this year in cancun the quantity of packages demanded increased by 10% , then what happened to the price of cancun vacation packages ?

Answers

Answer: Price reduced by 2%

Explanation:

The price elasticity of demand shows how the demand for a good will change as a result of a change in price. Demand will usually increase as a result of a decrease in price because people tend to demand more when goods are cheaper.

The formula is;

Price elasticity of demand = ΔQuantity demanded / Δ Price

-5 = 10% / P

-5P = 10%

ΔP = -2%

Other Questions
PLEASE HELP ME ITS MY LAST ONE!!! Read the sentences, look at the image and match each sentence with the name of the royal family member missing in the blank. Terms: La hermana de Sofa es ________. El padre Leonor es ________. La madre Leonor y Sofa es ________. La abuela de Leonor y Sofa es ________. Choices: A) Felipe IV B) Leonor C) Sofa D) Letizia Internal development of a new business subsidiary can be a more attractive means of entering a desirable new business than is acquiring an existing firm already in the targeted industry when A. the company has ample time and adequate resources to launch the new internal startup business from. the ground up. B. there is a large pool of desirable acquisition candidates. C.the target industry is growing rapidly and good joint venture partners are available. D. all of the potential acquisition candidates are losing money. E. the target industry is comprised of several relatively large and well-established firms. If sin2 x + cos2 y = 2 sec2 z, then general solution of triplets (x, y, z) is SOMEBODY HELP PLEASE! ACME Hardware is introducing a new product called Greener Cleaner. Complete the table by finding the cost per milliliter for each size based on the sales price. One liter is 1,000 milliliters. (Answer the questions too, please!) Identify characteristics of structured programming design. Choose all that apply.The code is easy to test and debug.It creates a program made of modules that can be called when needed.The code is difficult to modify due to the use of modules.It uses logic flow.The code is easier to follow.The code is easier to modify. Restricting imports Question 10 options: can protect United States jobs in the protected industry, which increases economic welfare of the country as a whole. can protect United States final goods and services in the protected industry and increase economic welfare of the country as a whole. can protect United States jobs in the protected industry but will also lead to reductions in U.S. output and income. can protect United States final goods and services in the protected industry and makes consumers better off. Write an equation perpendicular to the line y=3/2x-2 that goes through (-4,3) can someone tell me what crabs these are. A balloon is floating around outside your window. The temperature outside is 31 C , and the air pressure is 0.700 atm . Your neighbor, who released the balloon, tells you that he filled it with 4.10 moles of gas. What is the volume of gas inside this balloon? Express to THREE signficant figures. Google generates revenue by offering online ________ opportunities next to search results or on specific Web pages. This astronaut played golf on the moon.A. Neil ArmstrongB. Alan ShepardC. Gus GrissomD. Michael Collins Why is important to be competitive? advice for 10th grade PROGRAM 8: Grade Converter! For this program, I would like you to create a function which returns a character value based on a floating point value as Rose Hill Trading Company is expected to have EPS in the upcoming year of $8. The expected ROE is 18%. An appropriate required return on the stock is 14%. If the firm has a retention ratio of 70%, its dividend in the upcoming year should be _________. A. $1.12 B. $1.44 C. $2.40 D. $5.60 Which sentence has correct subject-verb agreement? Group of answer choices They clean and repair old furniture. They cleans and repair old furniture. They repairs and cleans old furniture. They repairs and clean old furniture. given a right-angled triangle with area 30 square centimeters and one of the legs of the right-angled triangle has 5cm, of the sum of the altitudes of the triangle can be expressed as a/b where gcd(a,b)=1. find a+b.geometry clacium hydroxide is slightly soluable in water about 1 gram will dissolve in 1 liter what are the spectator ions in the reaction ions in the reaction of such a dilute solution of calcium hydroxide with hydrochloric acid (MC)Read this story and then answer the question that follows:Sarah saw them again. Out of the corner of her eye she could see the kids ganging up on the new girl, Lara. She was late to her band practice and only had a few minutes to get there. "I barelykrow her stemmered to herset as she waked qulody to the car. "I'm sure she can take care of herself." Sarah knew this was an important rehearsal and could not miss it. "Hurry up,shouted her to from the one's seat. Sarah threw her guitar in the back seat and slammed the door. "Let's go," she said. As they rounded the comer and stopped at the stop sign-her heartmong-Sarah locked at the mom "Mom, Lara needs our help. Let's go back." which of the following is an example of theme in this story hich of the following cases would the U.S. Supreme Court be the first to hear? a civil trial between residents of one U.S. state a civil trial where neighbors sue one another a criminal trial involving a U.S. ambassador a criminal trial for a suspect in a murder