Q1. Suppose the market is initially in equilibrium. The initial demand course is P= 90-Q. The initial supply curve is P=2Q. Suppose that the government imposes a $3tax on this market. How much of this is $3 is paid by the producers? Solution
Q2. What are the equations I use for this question:
Metatrend's stock will generate earnings of $5/share this year. The discount rate for the stock is 15% and the rate of return on reinvested earnings is also 15%.
Find both the growth rate of dividends and the price of the stock if the company reinvests the following fraction of its earnings in the firm (1) 0 % (2) 40% (3) 60%