A share of stock expected to pay an annual dividend of $10 forever has a market price of __________ when the Treasury bond rate is 6% and the stock has a risk premium of 4%
A) $100.00
B) $166.67
C) $250.00
D) $500.00
A
You might also like to view...
If relative PPP held, then the real exchange rate must be equal to one
Indicate whether the statement is true or false
Wanda owns a lemonade stand. She produces lemonade using five inputs: water, sugar, lemons, paper cups, and labor. Her costs per glass are as follows: $0.01 for water, $0.02 for sugar, $0.03 for lemons, $0.02 for cups, and $0.10 for the opportunity cost of her labor. She can sell 300 glasses for $0.50 each. What are Wanda's explicit costs per glass?
a. $0.18 b. $0.10 c. $0.08 d. $0.02
Which of the following is not an idea advocated by Adam Smith?
A. Producers must compete with one another to win customer's business. B. Pursuit of private self interest with an invisible hand is the best way to promote the public interest. C. Government should control the economy. D. The government should provide for national defense and little else.
Lisa consumes only pizzas and burritos. In equilibrium, her marginal utility of pizza is 20 and her marginal utility of a burrito is 10. The price of a pizza is $4. What is the price of a burrito?
What will be an ideal response?