Question 7

Which of the following statements explains a decrease in the market equilibrium price for laptops?

Question 7 options:

An increase in consumer disposable income when laptops are inferior goods.

A change in consumer tastes and preferences making cell phones more attractive.

Improved technology that makes it less expensive to produce laptops.

An expected increase in the price of laptops in the future.

Question 8

James Co produces and distributes auto parts. Its strategy is based on the quality of its processes and materials, which are seen as being superior to those products made by its competitors. Which of the following is true about James Cos strategy?

Question 8 options:

James Co follows a product differentiation strategy.

James Co follows a price differentiation strategy.

James Co is a cost leader and follows a target-profit approach in its pricing.

The high-quality processes allow James Co to execute a cost leadership strategy.

Question 9

Based on the Dividend Discount Model, if a companys projected rate of growth in earnings and dividends is expected to increase, what effect will it have on its stock?

Question 9 options:

The value would decrease.

The value would increase.

The value would not change.

It is undeterminable.

Question 10

Johnson Company has 3 million shares of preferred stock that pays $5 in dividends per share annually. If an investors required rate of return is 9%, what is the value of Johnson Companys preferred stock per share?

Question 10 options:

	$0.45
	$5.00
	$5.56
	$55.56