Answer:
B. more shares will dilute the existing value of the stock, causing its market price to fall
Explanation:
A bond can be defined as a debt or fixed investment security, in which a bondholder (creditor or investor) loans an amount of money to the bond issuer (government or corporations) for a specific period of time.
Generally, the bond issuer is expected to return the principal at maturity with an agreed upon interest to the bondholder, which is payable at fixed intervals.
The reason a large publicly traded corporation would likely prefer issuing bonds as a way to raise new money as opposed to issuing more shares is because more shares will dilute the existing value of the stock, causing its market price to fall and may negatively affect by reducing the value and proportional ownership of the investor's shares in the corporation.
Answer: Financial
Explanation:
During the process of buying assets with longer life span, such as stock trailers, most organizations make use of cash gotten during financial activities to foot the bills, while cash accrued during operational activities are rather used to buy assets with shorter life span. Generally during the time of investing there is always decrease in excess cash as to supplying cash for some other activities.
In a market economy, like the one described in the question, there is the potential to achieve efficiency in production. This is because producers can choose what they produce and can focus on the products they are good at. This can help with economies of scale and efficiency.
Positive wording has an effect on the message getting received, which is the goal.
Answer:
Dividend yield = 5.54%
The expected capital gains yield = 6%
Explanation:
Next Dividend (D1) = $1.44
Growth rate (g) = 6%
Required return (Ke) = 6% + 5.54% = 11.54%
Ke-g = 11.54% - 6% = 5.54%
Price = D1 / (ke / g) = 1.44 / 5.54% = $25.9927 = $26
a. Dividend yield = D1 / Price = $1.44 / $26
Dividend yield = 0.05538
Dividend yield = 0.0554
Dividend yield = 5.54%
b. The expected capital gains yield = Required return (Ke) - Dividend yield
The expected capital gains yield = 11.54% - 5.54%
The expected capital gains yield = 6%
