Shortening the repayment schedule is not typically involved in rescheduling activities of a troubled sovereign loan.
Governments of independent political entities can issue debt, typically in the form of securities, known as sovereign debt.
Unique risks associated with sovereign debt are not present in other forms of lending.
The creditworthiness of sovereign debtors and the securities they issue is frequently rated by a number of private agencies.
Economies and political systems that are stable are often seen as having better credit risks, enabling them to borrow on more favorable terms.
Governments incur sovereign debt through the issuance of bonds, notes, and other debt instruments as well as by the borrowing of funds from other nations and international institutions like the International Monetary Fund.
Foreign currencies as well as domestic ones may be used to pay off sovereign debt, which may be due to outsiders or to the nation's own population.
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Answer:
c. An online retailer delivers organic groceries overnight.
Explanation:
As Different companies in different industries follow any one of the five general strategies to gain competitive advantage.
so The online retailer distributes organic groceries overnight, using a low-cost provider strategy. This is due to the intense competition in online retailing.
so correct option is c. An online retailer delivers organic groceries overnight.
C. Local customer group's concerns
The other two options are legal considerations of operating in a foreign country. Tariffs are taxes which require payment to comply with law.
Answer:
Expected return on equity is 11.33%
Explanation:
Using Weighted Average Cost Capital without tax formula, overall rate of return is given by the formula:
WACC=(Ke*E/V)+(Kd*D/V)
Kd is the cost of debt at 6%
Ke is the cost of equity at 12%
D/E=1/2 which means debt is 1 and equity is 2
D/V=debt/debt+equity=1/1+2=1/3
E/V=equity/debt+equity=2/1+2=2/3
WACC=(12%*2/3)+(6%*1/3)
WACC=10%
If the firm reduces debt-equity ratio to 1/3,1 is for debt 3 is for equity
D/V=debt/debt+equity=1/1+3=1/4
E/V=equity/debt+equity=3/1+3=3/4
WACC=10%
10%=(Ke*3/4)+(6%*1/4)
10%=(Ke*3/4)+1.5%
10%-1.5%=Ke*3/4
8.5%=Ke*3/4
8.5%=3Ke/4
8.5%*4=3 Ke
34%=3 Ke
Ke=34%/3
Ke=11.33%
