Inelastic where the demand for pretzels is relatively price

Reference no: EM1328946

Question about Present value of the stock

1. The demand for salt is relatively price inelastic, while the demand for pretzels is relatively price elastic. How can you best explain why?

2. If a stock is expected to pay an annual dividend of $20 forever, what is the approximate present value of the stock, given that the discount rate is 8%?

Reference no: EM1328946

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