If the Price of Ice Cream Changes by 30 Percent

question 106

Multiple Choice

If the price of ice cream changes by 30 percent and the quantity demanded changes by 75 percent, what is the absolute value of demand elasticity?

• A) 2.5, so demand is inelastic
• B) 0.4, so demand is inelastic
• C) 0.4, so demand is elastic
• D) 2.5, so demand is elastic

Calculate the cost of preferred stock.

Understand the concept of beta and its impact on the cost of equity and appropriate discount rates for projects.

Determine appropriate discount rates for specific project betas.

Calculate the expected stock market return based on dividend growth models.

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