Suppose that the demand for a magazine is 2200 copies each week if the magazine is given away for free and drops to 1975 each week if the price is $5 per copy. Find the demand function qD and use it to answer the following questions. You may want to look at pages 71 through 73 in the notes (videos 52 and 53). a. Fill in the blanks below to interpret the slope of the demand function. For every $ Blank 1. Calculate the answer by read surrounding text. increase in price, Blank 2. Calculate the answer by read surrounding text. fewer copies will be sold.
Dividend Valuation
Dividend refers to a reward or cash that a company gives to its shareholders out of the profits. Dividends can be issued in various forms such as cash payment, stocks, or in any other form as per the company norms. It is usually a part of the profit that the company shares with its shareholders.
Dividend Discount Model
Dividend payments are generally paid to investors or shareholders of a company when the company earns profit for the year, thus representing growth. The dividend discount model is an important method used to forecast the price of a company’s stock. It is based on the computation methodology that the present value of all its future dividends is equivalent to the value of the company.
Capital Gains Yield
It may be referred to as the earnings generated on an investment over a particular period of time. It is generally expressed as a percentage and includes some dividends or interest earned by holding a particular security. Cases, where it is higher normally, indicate the higher income and lower risk. It is mostly computed on an annual basis and is different from the total return on investment. In case it becomes too high, indicates that either the stock prices are going down or the company is paying higher dividends.
Stock Valuation
In simple words, stock valuation is a tool to calculate the current price, or value, of a company. It is used to not only calculate the value of the company but help an investor decide if they want to buy, sell or hold a company's stocks.
Suppose that the demand for a magazine is 2200 copies each week if the magazine is given away for free and drops to 1975 each week if the price is $5 per copy. Find the demand function qD and use it to answer the following questions. You may want to look at pages 71 through 73 in the notes (videos 52 and 53).
a. Fill in the blanks below to interpret the slope of the demand function.
For every $ Blank 1. Calculate the answer by read surrounding text. increase in price, Blank 2. Calculate the answer by read surrounding text. fewer copies will be sold.
b. Determine how many copies of the magazine would be sold each week if the price was set at $11 per copy.
Blank 3. Calculate the answer by read surrounding text. copies
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