Which of the following is true about signaling theory? A dividend increase is a sign of a higher payout ratio in the future A dividend increase is a sign of a higher dividend in the future A dividend increase is a sign of an undervalued stock A dividend increase is a sign of higher earnings in the future
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Which of the following is true about signaling theory?
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A dividend increase is a sign of a higher payout ratio in the future |
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A dividend increase is a sign of a higher dividend in the future |
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A dividend increase is a sign of an undervalued stock |
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A dividend increase is a sign of higher earnings in the future |
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- You are managing a competitive corn farm that faces random demand. You must decide how much corn to produce before observing the actual price. As the 2 adjacent figure shows, the price will be $12 or $6 per bushel. The probability the price will be $12 is and the probability that the price will be $6 is - Your MC 3 3 $14 marginal cost curve is also included in the figure. PH=MRH $12 The quantity of corn that maximizes expected profit is bushels. $10 (Carefully enter your response considering the units on the axes of the given figure.) S8 The quantity you would produce if you knew the actual price was $12 is bushels. L= MRL The quantity you would produce if you knew the actual price was $6 is bushels $6 Suppose you produce the quantity of corn that maximizes expected profit, compared to what you would produce if you knew the actual price before producing. $4- The amount of profit lost if the actual price is $12 is $ The amount of profit lost if the actual price is $6 is $ (Enter a…Respond to the question with a concise and accurate answer, along with a clear explanation and step-by-step solution, or risk receiving a downvote. Respond to the question with a concise and accurate answer, along with a clear explanation and step-by-step solution, or risk receiving a downvote.A distillery makes whisky, where its profits from production per bottle are given by T = p – y? where p is the price it charges per bottle and y is the number of years the bottle is aged. There are two types of whisky drinkers, connoisseurs (H type) and casuals (L type). H-type have utility UH (y, p) = 8y – p, while L-type have utility uz (y, p) = 2y – p. There are 10 consumers of each type, and each will buy at most one bottle. Each consumer's utility if she does not buy is 0. If a consumer is indifferent between buying two bottles, assume she will buy the more aged one (the one with higher y). If a consumer is indifferent between buying a bottle and not buying, assume she will buy. Bottles are characterised by (y, p), years of age and price. For each menu of offerings below, calculate the distillery's profit. (1, 9) and (4, 24) (1, 2) and (4, 24) (1, 2) and (2, 24) Calculate the firm's profits when it chooses the optimal menu.
- BPO Services is in the business of digitizing information from forms that are filled out by hand. In 2006, a big client gave BPO a distribution of the forms that it digitized in house last year, and BPO estimated how much it would cost to digitize each form. Form Type Mix of Forms Form Cost A 0.5 $3.00 B 0.5 $1.00 The expected cost of digitizing a form is . Suppose the client and BPO agree to a deal, whereby the client pays BPO to digitize forms. The price of each form processed is equal to the expected cost of the form that you calculated in the previous part of the problem. Suppose that after the agreement, the client sends only forms of type A. The expected digitization cost per form of the forms sent by the client is . This leads to an expected loss of per form for BPO. (Hint: Do not round your answers. Enter the loss as a positive number.)Suppose research at Panasonic reveals that prospective buyers are anxious about buying high definition television sets. What strategies might you recommend to the company to reduce consumer anxietyWhat is loss aversion? Group of answer choices The tendency to focus more on the loss than the gain. The tendency of an individual to invest all of their resources to avoid losing. The ability of humans to exercise complete self control in high stakes situations to avoid losing. The temptation company’s face to invest in questionable techniques to avoid losing money.
- Aji owns a rental space in New York and is thinking of opening a restaurant in that space. An accountant looks at the estimated out of pocket costs and expected revenues. He informs Aji that the restaurant will make profits. But Aji's economist friend tells her that the restaurant business is not likely to be profitable. Both the accountant and the economist can be correct. True FalseIn the field of financial management, it has been observed that there is a trade-off between the rate of return that one earns on investments and the amount of risk that one must bear to earn that return. a) Draw a set of indifference curves between risk and return for a person that is risk-averse (a person that does not like risk).After graduating, you start work as a management consultant. You are paid $210 per hour. One morning before work, you decide to buy a new car. You know the exact model you want, and you know that in your area the price ranges from $39,000 to $41,000, with the average price you can expect to pay being $40,000. You can choose among hundreds of dealers, but you don't know which dealer will give you the best price. Time is literally money, since every hour you spend searching is an hour you don't get paid. Each visit to a dealer takes an hour. Your expected marginal benefit of another search is the difference between the current dealer's offer and the average price. The first dealer you go to asks $40,500 for the car. Should you accept the price or keep searching? (Keep in mind that each visit to a dealer takes an hour.) Keep searching. Accept the price. Suppose you kept searching, and the next dealer you go to asks $40,150. Do you think you should accept this price or keep searching? O…
- Each stock listed on the New York Stock Exchange is allocated to a specialist, who is responsible for maintaining an orderly market. This person has a specific location on the floor of the exchange known asUse the expected value information to illustrate how having more bidders in an oral auction will likely result in a higher winning bid.Vaporware is the designation for products announced by firms well before their availability. For example, to keep customers from defecting to the impending introduction of Windows 95, Apple Computer announced updates to Mac OS7 in 1994. But it was not introduced until three years later in Mac OS8. Vaporware is seen as a form of commitment, or deception, or simply a marketing ploy. Give an example of vaporware and discuss its value for the firm