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Alchen [17]
3 years ago
8

American leaders in the early United States wanted to establish a stable banking system in order to

Business
1 answer:
Sergeeva-Olga [200]3 years ago
6 0
The answer is letter B.

American leaders in the US wanted to establish a stable banking system in order to promote international trade and economic growth. This idea came to be when America experienced the great depression, where its economy experienced a decline after the War. 
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The market value of​ Fords' equity, preferred​ stock, and debt are $ 7 ​billion, $ 2 ​billion, and $ 13 ​billion, respectively.
Alisiya [41]

Answer: 9.48%

Explanation:

Given Data

Debts ;

$7 billion

$2 billion

$13 billion

Beta of Fords stock = Beta = 1.50

Market risk premium = Rp = 8.0%

Risk free rate of interest = Rf = 4.0%

Equity rate = 1.7

Market risk rate = 0.8

Risk free rate = 0.03

Therefore;

Cost of Equity ( Re ) = Risk free rate + equity rate × market risk premium

= 0.03 + (1.7 × 0.8)

= 0.166

Preferred Stock Cost ( PSC)= Dividend ÷ stock price

= 4 ÷ 30

= 0.1333

Total debt = 13 + 6 + 2 = 21 billion

D% = 13 billion ÷ 21 billion

      = 0.619

E% = 6 billion ÷ 21 billion

     = 0.286

P% = 2 billion ÷ 21 billion

     = 0.095

RD = debt capital at 8% maturity rate

Tc= 30%

Rwac =(w/ preferred stock)

= Re × E% + PSC × P% + Rd ( 1- Tc) D%

Rwac = (0.166)(0.286) + (0.1333)(0.095) + (0.08)(1- 0.3)*(0.619)

= 0.094803 * 100

= 9.48%

At 30% tax rate Ford weighted average cost is 9.48%

4 0
3 years ago
Vaughn Company issues 11,300 shares of restricted stock to its CFO, Mary Tokar, on January 1, 2020. The stock has a fair value o
Firlakuza [10]

I think you made mistakes in the dates which i have corrected in the explanations----Prepare the journal entries to record the restricted stock on "January 1, 2017" (the date of grant), and "December 31, 2018"

Answer: Please see answer in explanation column

Explanation:

To record unearned compensation

Date      Account titles and explanation      Debit          Credit

Jan 1, 2020 Unearned compensation       $565,000  

   To Common stock ( 11,300 shares × $10)                     $113,000  

To Paid in capital in excess of par - common stock      $452,000

To record the compensation expense

Date      Account titles and explanation        Debit              Credit

Dec 31, 2020  Compensation    expenses      $113,000  

   To    Unearned compensation                                             $113,000

Calculation:

Compensation expenses =$565,000 ÷ 5 years=   $113,000

To record the forfeiture

Date             Account titles and explanation          Debit                Credit

July 25, 2021   Common stock                               $113,000

Paid in capital in excess of par - common stock    $452,000

To Compensation expenses                                                             $113,000  

To Unearned compensation                                                            $452,000

Calculation:

Common stock ( 11,300 shares × $10)= $113,000

To Compensation expenses  $113,000  ($113,000 × 1 year) January 1, 2020-July 25, 2021,

Unearned compensation =fair value of $565,000 --Compensation expenses  of $113,000   =  $452,000

7 0
3 years ago
Adrian contributed an antique vase she had owned for 25 years to a museum. At the time of the donation, the vase had a value of
EastWind [94]

Answer:

How much may Adrian deduct?

This depends on whether the museum is private or not. If the museum belongs to a public charity or a university, then Adrian can deduct full fair market value = $35,000. Since Adrian's AGI is $80,000, she could donate up to $40,000 (half her AGI).

But if the museum is a private organization, then Adrian can deduct only her basis in the vase = $15,000

How would your answer to Part a change if, instead of displaying the vase, the museum sold the vase to an antique dealer?

Once you donate artwork, unless you strict prohibit the museum from selling it, then they can sell it and you cannot do anything about it. Some donors specific certain terms for their donations, e.g. artwork cannot be sold and it must be exhibited at least a certain amount of time, in certain places, etc. But if Adrian didn't include any clause on her donation, then whatever happens to the vase is up to the museum.

Currently, museums are less likely to accept restricted donations, unless of course the artwork is worth it.

4 0
3 years ago
Sell foreign exchange assets and buy their own currency
Irina18 [472]

We consider first the equilibrium in the money market. The portfolio choice of individuals is to decide how much to invest in various financial assets. Suppose, for simplicity, that an investor has to decide how much to invest of her assets into money (cash balances that have a zero interest rate return) and how much to invest into interest bearing assets (short term Treasury bills).

Money (cash) balances have the disadvantage of not offering any nominal return (zero interest rate); they have the advantage that you can use them to do transactions (buy/sell goods). Short term bonds have the advantage that they earn interest; however, they have the disadvantage that they cannot be used to make transactions (you need money to buy goods and services). So, an investor will decide to allocate its portfolio between money and bonds considering the benefits and costs of both instruments.

So the demand for money will depend positively on the amount of transactions made (GDP, Y) and negatively on the opportunity cost of holding money: this is the difference between the rates of return on currency and other assets (bonds):

Asset     Real Return     Nominal Return

Cash             -p                         0

T-bill             r                     i = r + p

Difference     i = r + p         i = r + p

where p is the inflation rate, i is the nominal interest rate and r is the real interest rate.

So the nominal demand for money is:

           +     -  + 
MD = P L( i , Y)

MD is the number of dollars demanded

P is the price of goods

L is the function relating how many $ are demanded to Y and i.

The equation suggests that there are three main determinants of the nominal demand for money:

1. Interest rates. An increase in the interest rate will lead to a reduction in the demand for money because higher interest rates will lead investors to put less of their portfolio in money (that has a zero interest rate return) and more of their portfolio in interest rate bearing assets (Treasury bills).

2. Real income. An increase in the income of the investor will lead to an increase in the demand for money. In fact, if income is higher consumer will need to hold more cash balances to make transactions (buy goods and services).

2. The price level. An increase in the price level P will lead to a proportional increase in the nominal demand for money: in fact, if prices of all goods double, we need twice as much money to make the same amount of real transactions. Since the nominal money demand is proportional to the price level, we can write the real demand for money as the ratio between MD and the price level P. Then, the real demand for money depends only on the level of transactions Y and the opportunity cost of money (the nominal interest rate):

MD/P = L(Y, i*)

7 0
3 years ago
Carter County entered into a capital lease to finance an Emergency-911 telecommunications system. The capitalized cost of the eq
Sloan [31]

Answer:

The second option

Explanation:

Expenditures

Other Financing Source

Cash $185,000

$160,000

25,000

3 0
3 years ago
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