Answer:
The false statement is letter "D": Bonds are always less risky than stocks.
Explanation:
A bond is a unit of debt issued by a company to the bondholder and considered tradeable security. A bond has a fixed return since it is paid at a fixed rate. The price of the bond is inversely correlated with the interest rate: when the rate goes up the bond price fall and when the rate falls the bond price goes up. Even if bonds are less risky than stocks, they are not always less risky than stocks.
Answer:
Post split Shares: 800,000
Post split par value: $0.25
Explanation:
Stock split seeks to increase the number of shares available for trading on the exchange thus increasing the liquidity. Stock split of 4 for 1 increases the shares by 4 times e.g. every holder of 1 share will receive total of 4 new shares. Thus the shares will increase to 4 times: (200,000 * 4) = 800,000.
Post split share price is calculated by dividing par value to the proposed split.
($1 / 4) = $0.25 per share.
Answer: (C) there must be some valuable economy of scope among the multiple businesses in which a firm is operating and it must be less costly for managers in a firm to realize these economies of scope than for outside equity holders on their own.
Explanation:
The concept of economy economy of scope opines that the unit cost of producing a product will decline as the variety increases. The earlier the managers of the firm realizes these economies of scope, the better it will be for production and profit maximization for not just the ownership entity but including the outside equity holders
