Answer:
Government's tax revenues would decrease by $1,250
Explanation:
Please refer the complete question below
Song earns $100,000 taxable income as an interior designer and is taxed at an average rate of 20 percent (i.e., $20,000 of tax). Answer the questions below assuming that Congress increases the income tax rate such that Song's average tax rate increases from 20 percent to 25 percent.
What will happen to the government’s tax revenues if Song chooses to spend more time pursuing her other passions besides work in response to the tax rate change and therefore earns only $75,000 in taxable income
If Song opts for pursuing his other passions he will end up earning $75,000 and therefore since the tax rate is now 25% he will have to pay $18,750 ($75,000 x 25%) as against the $20,000 ($100,000 x 20%) taxed previously and hence government's tax revenues would decrease by $1,250 ($20,000 - $18,750).
<u>Answer:</u>Option c
<u>Explanation:</u>
Some of the macro economic event such as interest rates, unemployment, economic growth and inflation affects the stock markets . If any of these events occur then market has its effect on it. EMH is the efficient market hypothesis that the asset prices reflect the market situation.
When the macroeconomic event has not taken place but there is market decline then EMH is not consistent with the event or the macro economic news.Market prices also reflect due to the latest information if any.
Answer:
the firm's cost of equity is 17.808%
Explanation:
A firm's cost of equity is the return expected by holders of Common Stock.
The Data available allows us to use the Capital Asset Pricing Model (CAPM) to determine the cost of Equity.
Cost of Equity = Risk Free Rate + Company`s Beta × Expected Return on Market Portfolio
= 2.8%+1.34×11.2%
= 17.808%