Garrett Corp. has been going through a difficult financial period. Over the past three years, its stock price has dropped from $50.00 to $18.00 per share.
Throughout this downturn, Garrett has managed to pay a $1.00 dividend each year. Management feels the worst is over, but intends to maintain the $1.00
dividend for three more years, after which they plan to increase it by 6% per year indefinitely. Comparable stocks are returning 11%.
If these projections are accurate, is Garrett stock a good buy at $18.00? How do you think the market feels about Garrett’s management?

scenario: hawaii and south carolina are trading partners. hawaii has an absolute advantage in the production of both coffee and tea. the opportunity cost of producing 1 pound of tea in hawaii is 2 pounds of coffee, and the opportunity cost of producing 1 pound of tea in south carolina is 1/3 pound of coffee. which of the following statements is true? a. south carolina should specialize in the production of both tea and coffee. b. hawaii should specialize in the production of tea, whereas south carolina should specialize in the production of coffee. c. hawaii should specialize in the production of coffee, whereas south carolina should specialize in the production of tea. d. hawaii should specialize in the production of both tea and coffee.