When the world relative price lies somewhere between the autarky relative price, D. Home and Foreign will gain from trade.
It should be noted that a relative price simply compares the price of a commodity in terms of another.
In this case, when the world relative price lies somewhere between the autarky relative price, both home and foreign will gain from trade.
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When the world relative price is within the range of the autarky relative prices of Home and Foreign countries, it implies better rates for international trade as compared to the domestic trade for both countries. Thus, both Home and Foreign will benefit from trade.
If the world relative price lies somewhere between the autarky relative price of Home and the autarky relative price of Foreign, then both Home and Foreign will gain from trade. This implies that the global trade price falls within the local prices at which both countries would independently trade goods. Consequently, both countries will benefit because they can now trade at better terms.
Here's how it works: At autarky (a state where a country does not engage in international trade), each country would trade goods domestically at a certain price ratio (the relative price). If the global trade price falls within these domestic relative prices, then both countries can trade internationally at better rates compared to their autarky situation, leading to mutual beneficial trade.
Therefore, the answer to your question is (d) Home and Foreign will both gain from trade.
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Answer:
A
Explanation:
the sales price increase and because the variable cost are the same the contribution margin will increase, which lead to think the BEP is lower.
But, because the fixed cost also increase we cannot determinate where the new BEP Will be higher or lower. The fixed cost could increase so much that nulifies the increase in the contribution margin or even be higher enought that the BEP goes higher.
So Option A is the only true statment.
Question
The question is incomplete. The complete question is given as follows:
You consider buying a share of stock. The stock is expected to pay a dividend of $1.50 next year, and dividends are expected to grow by 5% per year forever. What is the stock price now if the stock's beta is 1.1, rf is 6%, and E[rm] = 16%.
Answer
Stock price = $12.5
Explanation:
Using the dividend valuation model, the value of a stock can be determined using this model:
Price = D(1+g)/(r-g)
D- dividend payable now, g- growth rate in dividend, r-return on equity
Return on equity
Re= Rf + β(Rm -Rf)
Rf- risk-free rate, Rm - Return on market portfolio, β- Beta factor
To determine the Stock price we follow the steps below
Step 1
Determine the cost of equity
r = 6% + 1.1 *(16%-6%)
= 17%
Step 2
Determine the stock price
Stock price = 1.50/(0.17-0.05)
= $12.5
Stock price = $12.5
Note
D*(1+g) = Dividend next year. And this has been given as $1.50. So there is no need to apply the growth rate.
b. 200
c. 50
d. 100
e. 1000
Answer: 100
Explanation: Its 100
Answer:
The journal entry correctly records this transaction is:
b. Cash 1,300, Accounts receivable 1,200, Consulting revenue 2,500
Explanation:
Kincaid Company provided consulting service of $2,500 to a customer, the company record revenue for consulting service of $2,500
Customer paid $1,300 and promised to pay the remainder next month, the company record cash received of $1,300 and the remainder by decreasing accounts receivable of $1,200 by the entry:
Debit Cash $1,300
Debit Accounts receivable $1,200
Credit Consulting revenue $2,500
The correct journal entry to record this transaction is option b: Cash1,300, Accounts receivable1,200, Consulting revenue2,500.
The correct journal entry to record this transaction is option b: Cash1,300, Accounts receivable1,200, Consulting revenue2,500.
The entry debits Cash for $1,300, which represents the amount received in cash from the customer. It credits Accounts Receivable for $1,200, which represents the remaining amount the customer promised to pay next month. Finally, it credits Consulting Revenue for $2,500, which represents the total amount of revenue earned from the consulting service provided.
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Answer: Tell your manager about this offensive behavior.
Explanation:
If I overhear a group of your co-workers laughing at some crude jokes about a few customers, the most likely thing for me to do will be to inform my manager about this offensive behavior.
Customers are vital to every business and should be treated right, without the customers, there isn't any business at all. Therefore, I'll inform my manager so that he'll have an idea of what is going on and then call them to order and explain to them that customers should be treated right and respected.
Answer:
False
Explanation:
This is a True/False question and the answer is false because of the reason highlighted below.
When there's a decrement in the values of the market price of a 100 shares, there's a high probability that one will receive a margin call. The essence of the margin call is none other than asking to make up for the loss in the decreased value of the 100 shares because legally, the brokerage firm have the right to sell one's shares in other to cover your losses.
And also because, buying on margin can never be an "interest free.", this is the reason why the broker will demand the payment of interest on the loan.
The question discusses margin trading in the stock market, where the investor borrows money from a broker to buy more shares. In this example, the investor buys 100 IBM shares at $120 each, contributing half the total cost and borrowing the rest. If the share price rises, the investor can sell, repay the loan, and make a profit.
The topic here is related to stock market investing and more specifically, margin trading. When you buy on margin, you are essentially borrowing money from your broker to purchase more stocks than you could with just your available cash. In your example, you bought 100 shares of IBM for $120/share, which totals $12,000.
Since the margin on your account is 50%, this means that you only need to provide half of this amount, or $6,000, and the broker will loan you the remaining $6,000. The goal is that the price of IBM shares sufficiently rises, at which point you may choose to sell your shares, repay the broker's $6,000 loan, and then keep any remaining profit as your capital gain.
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