If the present value equation used to calculate the price of a stock you are considering buying is "[$12 / (0.05 - 0.02)]," which of the following is correct, assuming that dividends will grow at a constant rate?
A) The dividend is $12 per share, the dividend growth rate is 5 percent, and the interest rate is 2 percent.
B) The dividend is $12 per share, the dividend growth rate is 2 percent, and the interest rate is 5 percent.
C) The stock price is $12, the dividend growth rate is 5 percent, and the interest rate is 3 percent.
D) The stock price is $12, the dividend growth rate is 2 percent, and the interest rate is 5 percent.
A
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An indifference map states:
a. indifference curves farther from the origin yield higher levels of total utility. b. that the consumer's income varies with the level of the indifference curve. c. indifference curves closer to the origin yield higher levels of total utility. d. that the points on either parts of indifference curves are preferred to the midpoint.
Which of the following is true if the international price of coffee increases?
a. The demand for tea, a substitute good, will decrease. b. The demand for coffee will increase. c. The demand for coffee and tea will decrease. d. Both the demand for coffee and tea will increase. e. The demand for tea, a substitute good, will increase.
A budget surplus is defined as the amount that the
a. government owes to lenders at any moment in time. b. government spends in any time period. c. government's expenditures exceed receipts in any time period. d. government's receipts exceed expenditures in any time period.
The price elasticity of demand for eggs is -0.27. Therefore, an increase in the price of eggs will cause:
A. a decrease in egg suppliers' total revenue. B. an increase in the quantity demand of eggs. C. an increase in egg suppliers' total revenue. D. an increase in the demand for eggs.