The best explanation of how the principle of demand and supply has affected the price of the record player is:
- Because there are several vending booths in the same area selling the same item, there would be a reduction in price to attract more customers.
<h3>What is Demand?</h3>
This refers to the quantity of goods which are requested by consumers at a particular time period which has an effect in the price of the good.
With this in mind, the principle of demand and supply was in effect as in the flea market, there was a reduction in price of an old record player because there was a lot of the goods in a location.
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Answer:
a. Suppose GP issues $ 100$100 million of new stock to buy back the debt. What is the expected return of the stock after this transaction?
b. Suppose instead GP issues $ 50.00$50.00 million of new debt to repurchase stock. i. If the risk of the debt does not change, what is the expected return of the stock after this transaction?
ii. If the risk of the debt increases, would the expected return of the stock be higher or lower than when debt is issued to repurchase stock in part (i)?
- If the risk of the debt increases, then the cost of the debt will increase. Therefore, the company will need to spend more money paying the interests related to the new debt which would decrease the ROE compared to the 18% of (i). Since we do not know the new cost of the debt, we cannot know exactly by how much it will affect the ROE, but I assume it will still be higher than the previous ROE.
Explanation:
common stock $200 million
total debt $100 million
required rate of return 15%
cost of debt 6%
current profits = ($200 million x 15%) + ($100 x 6%) = $30 million + $6 million = $36 million
if equity increases to $300 million, ROI = 36/300 = 12
if instead new debt is issued at 6%:
equity 150 million, debt 150 million
cost of debt = 150 million x 6% = $9 million
remaining profits = $36 - $9 = $27 million
ROI = 27/150 = 18%
Answer:
Dr Available for sale securities 11,500
Cr Unrealized gains - AFS securities 11,500
Explanation:
The securities cost is $420,000 while the fair market value is $431,500, so the difference is an unrealized gain of = $431,500 - $420,000 = $11,500.
Unrealized gains are included in Other comprehensive income account, which belongs under stockholder equity. When unrealized gains increase, then they should be credited.
Since the securities are held as investment assets, they should also increase by debiting the account.
Nicotine has a stimulant effect and therefore is addictive. The addictive effect is noticable in people who still smoke cigarettes even though they are aware of the very real dangers of lung cancer induced by lengthy cigarette smoking.
Answer:
The answer is: A) 0.6
Explanation:
First we will calculate the midpoint for units:
- change in units = 40 - 60 = -20
- average units = (40 + 60) / 2 = 50
- midpoint for units = 20 / 50 = 0.4 (we only use positive numbers)
Now we will calculate the midpoint for price:
- change in price = 40 - 20 = 20
- average price = (40 + 20) / 2 = 30
- midpoint for units = 20 / 30 = 0.67
Finally we divide 0.4 / 0.67 = 0.6
