Answer:
TRUE
Explanation:
Marginal Benefit is addition to total benefit due to a business decision.
Marginal Cost is addition to total cost due to a business decision.
Marginal Benefit & Marginal Costs are determinants while considering a business decision. A decision will be taken if : Marginal Benefit ≥ Marginal Cost, as entrepreneurial decision maker would be better off or at least neutral while taking decision. If MB < MC , it is loss making for the entrepreneur to take that decision & hence is discouraged to take that.
Answer:
AA-rated revenue bond that is escrowed to maturity.
Explanation:
AA-rated revenue bond that is escrowed to maturity, is the bond recommendation for an individual who seeks income that is free from federal income tax. Escrowed to maturity bond are pre-funded municipal bond and it is backed by the government. The Issuer invests the new bond´s income too high credit securities and also issuer hold proceeds from the new bond issue in a separate escrow account to pay off existing bond when it matures.
Answer:
auto pay takes money out automatically
Answer:
Required rate of return = 10.75%
Explanation:
<em>The value of a stock using the dividend valuation model, is the present value of the expected future dividends discounted at the required rate of return. The required rate of return is the cost of equity
</em>
The model is represented below:
P = D× (1+g)/ ke- g
Ke- cost of equity, g - growth rate, p - price of the stock
This model can used to work out the cost of equity, as follows:
Ke = D× (1+g)/p + g
Ke = (1.48× 1.05)/27 + 0.05
Ke= 0.107555556
Required return = 0.1075 × 100 = 10.75
Required rate of return = 10.75%
Answer:
The amount of income that David will report this year if he elects to amortize the bond premium is $455.94.
Explanation:
This can be calculated as follows:
Interest income = Carrying value of the bond * Yield to maturity…………….. (1)
Where;
Carrying value of the bond = $13,410
Yield to maturity = 3.4%
Substituting the values into equation (1), we have:
Interest income = $13,410 * 3.4% = $455.94
Therefore, the amount of income that David will report this year if he elects to amortize the bond premium is $455.94.