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Basile [38]
2 years ago
13

True or false?

Business
1 answer:
Nimfa-mama [501]2 years ago
5 0

Answer:

Both statements are False

Explanation:

<u>Statement a</u>

As with higher debt involved the expected return on investment is more on equity. But reducing debt up till a certain level is beneficial in that condition, but there is an ideal debt to equity ratio of 1 - 1.5, it varies upon the industry requirements and conditions.

Although the theory which states that reducing debt will reduce cost of equity and of debt is false as there is a tax benefit on debt which states that cost is always less of debt.

<u>Statement b</u>

Financial distress and bankruptcy has several reasons to occur, and one of them is borrowing.

It do not depend on the level of borrowings, whether moderate or high, borrowings demand compulsory payment in the terms of interest due, which leads to a burden on the company. This also increases the demand of shareholders.

Thus, the statement is false.

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Joanna is deciding between consuming Good X and Good Y. At her current level of consumption, her marginal utility per dollar for
ikadub [295]

Answer:

D) consume more of Good X or less of Good Y until the marginal utility per dollar for Good X and Good Y is equal.

Explanation:

Since Joanna's marginal utility per dollar is higher for good X than per good Y, then she must consume a combination of both goods until their marginal utility per dollar is equal.

Since marginal utility is diminishing, if she reduces her consumption of good Y, maybe it will increase and match X's. Or she can choose to consume more X until its marginal utility diminishes and matches Y's.

3 0
2 years ago
The following stock transactions were completed by the executive vice president of Vinco, Inc., a publicly traded corporation: J
kirza4 [7]

Answer:

d- EVP has a short-term swing profit is $3000

Explanation:

Lets first understand what short-term swing profit is. Short-term swing profit is profit dependent upon a rule normally set by the securities & exchange commission which states that  any profits made by company insiders through the purchase and sale of share/stocks within six months must be returned to the company. Company insiders are people/employees working within the entity mostly having more than 10% of company's shares or employees such as executives, directors and managers.

Now It's not clear from the question what the purchase price of the shares was when EVP sold them on January 12 2016, assuming these shares were purchased at $20, then the short-term swing profit would be $2000 as at January. Then EVP purchases 100 shares at $20 and sells them at $30 per share as at june. The additional short-term swing profit would be $1000 (i.e $30-$20=$10 per share).

Therefore the total short-term swing profit is $3000

4 0
2 years ago
Each month jessica buys exactly 15 big macs regardless of the price. jessica's price elasticity of demand for big macs is:
faust18 [17]

Price of elasticity of demand represents the measure of the change in the quantity demanded of a product in relation to its price change. The fact that Jessica buys each month exactly teh same quantity of the roduct (Big Mac) no matter what the price of the product ismeans that Jessica's price elasticity of demand for Big Macs is: 0.

In this situation the price of the product does not affect the demand.


7 0
2 years ago
Read 2 more answers
You purchase a bond with a coupon rate of 5.3 percent and a clean price of $951. Assume a par value of $1,000. If the next semi
olchik [2.2K]

Answer:

The invoice price is $ 969.

Explanation:

This question requires us to tell the invoice price (dirty price) of the bond. Clean price is given in the question. So we can easily calculate invoice price by adding accrued interest in dirty price. Detail calculation is given below.

Clean price          = $ 951 -A

Accrued Interest =  (5.3% * 1000)/12*4 = $ 17.67 -B

Invoice price = A+B = $ 969 (approx)

4 0
2 years ago
Which of these statements demonstrate the economic concept of scarcity? check all that apply. all useful resources are limited i
Zigmanuir [339]
The following statements describe the economic concept of scarcity:
1. All useful resources are limited.
2.Resources are scarce which explain why we are willing to pay for them.
3. Because of scarcity, individuals must make choices.
In economics, scarcity is the study of how people attempt to satisfy their needs and wants by making choices. The principle of scarcity states that limited goods and services are available to meet unlimited wants.
7 0
2 years ago
Read 2 more answers
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