Answer:
$9.74
D0 $0.75
b 1.70
rRF 4.5%
rM 10.5%
g 6.5%
D1 = D0(1 + g) =$0.7988
rS = rRF + b(rM - RRF) =14.7%
P0 = D1/(rS - g)=$9.7
Explanation:
Answer:
The answer is letter A.
Explanation:
The true statement is Annual data on the distribution of income will indicate that the degree of income inequality in the two cities is identical.
Answer:
During the Great Depression many businesses failed. The default risk for the corporate bond increased compared to the default-free Treasury bond. The demand for corporate
bonds decreased while the demand for Treasury bonds increased resulting in a larger risk premium.
Explanation:
Answer:
a. Savers who lend money are willing to accept a lower minimum interest rate than potential savers who do not lend money.
b. Investment projects that are financed by savers have larger rates of return than projects that do not receive financing.
Explanation:
Loanable funds refer to the aggregate amount of money that all sectors, entities and individuals within an economy have decided to keep as an investment, instead of spending on personal consumption, by saving and giving them out as loans to borrowers.
The market for loanable funds is in equilibrium when the supply of loanable funds by the saver is equal to demand for loanable funds by the borrowers at a given interest rate.
When the market for loanable funds is in equilibrium, efficiency is maximized because projects that have higher rates of return are given priority to be funded first before the projects with lower rates of return are funded. The reason is that savers that have lowest costs of lending provides funds for the projects that have highest return rates in equilibrium. However, potential saver who do not lend money will prefer a higher interest rates.
Therefore, the correct options related to the two aspects of efficiency that the equilibrium of market for loanable funds exhibits are as follows:
a. Savers who lend money are willing to accept a lower minimum interest rate than potential savers who do not lend money.
b. Investment projects that are financed by savers have larger rates of return than projects that do not receive financing.
Answer:
The right approach is Option d (Sales commissions).
Explanation:
- Sales commission seems to be an expense for the time that is not reflected throughout inventory commodity prices. That would be the amount that could be received by a sales agent as well as a sales representative including its price of a property.
- The cost of products generated, credit card payments, postage charges the sales commission that you will allocate to sales workers are including variable costs.
Some other three choices are not associated with the case in question. So, option d seems to be the right choice.
