Answer:
e. As they are generally defined, money market transactions involve debt securities with maturities of less than one year.
Explanation:
Statement E, As they are generally defined, money market transactions involve debt securities with maturities of less than one year is true.
Statement A is not true. It is primary market transaction.
Statement B is not true. Individuals can also participate in derivatives market transactions.
Statement C is not true. The IPO market is a subset of the primary market.
Statement D is not true. It is a direct transfer of capital.
A. It might be important to get a lower interest rate on a mortgage because it means lower monthly payments.
Answer:
1. Reputation.
Apple and IBM are big companies which is why their reputation was able to survive the bribery charges. You are most likely not as big as either of these companies so if you are charged with bribery, your reputation might not be able to recover like theirs did.
It is always best to be associated with a good reputation. A good reputation gives you customers who will be loyal because they appreciate the integrity you have. You should not throw this away by bribing people.
2. Consequences.
It is because Apple and IBM are so big that they were able to settle the bribery charge with the Courts. Smaller companies or people that have lesser effects on the financial system might find that their punishments will be more severe to act as a deterrent.
Answer:
13.87%
Explanation:
Fristly, we calculate the cost of equity using capital asset pricing model:
Cost of equity_1 = Risk-free rate + Beta x Market risk premium
= 2.9% + 1.62 x 8.2% = 16.18%
<em>(Note: T-bill yield is used as a proxy for risk-free rate).</em>
Secondly, we find the implied cost of equity using dividend discounted model:
Stock price = Next year dividend/(Cost of equity_2 - Long term dividend growth) or:
25 = 1.87 x (1 + 3.8%)/(Cost of equity_2 - 3.8%). Solve the equation, we get: Cost of equity_2 = 11.56%
So the average cost of equity of the two method is (16.18% + 11.56%)/2 = 13.87%.
Explanation:
Stocks shares of a company is the legal claim of the buyer over the assets and earnings of a company. When a person buys stocks of a company, he is given a certificate of ownership on the assets and capital or earnings of the company. When you buy more and more stocks, your strength or claim or share on the company increases automatically. So it is always advised to buy stocks of company which is doing good in the market. In this way, you would earn handsome amount of earnings as well and there are less chances of financial instability of the company.
