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Juli2301 [7.4K]
3 years ago
13

Suppose the risk-free rate is 3.5%; on average, an AAA-rated corporate bond carries a credit spread of 0.3%, an A-rated corporat

e bond carries a credit spread of 1.1%, and a B-rated corporate bond carries a credit spread of 3.9%. Company XYZ's outstanding debt is rated BBB by rating agencies. What would be the cost of debt for XYZ based on prevailing market rates? Multiple Choice
A .4%
B .5%
C .8%
D .6%
Business
1 answer:
KIM [24]3 years ago
3 0

Answer and Explanation:

The answer given in the question are not correct. Following should be the choices:

A: 6.5%

B: 7.4%

C: 3.8%

D: 4.6%

The correct answer is A. 6.5 %

The reason is:

3.5% x 1.1% = 4.6%

3.5% + 3.9% = 7.4%

It has to be in between this which is,

4.6% < 6.5% < 7.4%

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In many developing countries, the majority of citizens make their living through microenterprises- informal, tiny businesses tha
natita [175]

Answer:

The company provides micro financial services to poor and the needy people having no access to regular banking services

This helps to boost small businesses and financial inclusion which are heart of any economy and vital to the economy and promoting growth.

Possible measures taken by the organization includes providing funds for at lower interest rates and providing credit services. Subsidized credit to deficient areas increases productivity and employment growth by means of boosting the small and medium-sized enterprises.

This may work in poor communities in United States. However in united schemes there are lots of other governmental schemes such as coupons, free food etc program are already running.

However, these programs are also carrying a potential here. But there potential is much greater in poor countries having less developed banking and financial reach.    

Explanation:

6 0
2 years ago
Assume that Luxland and Leanderland specialize and trade in a way that is advantageous for bothof them. Explain what will happen
katen-ka-za [31]

Question Completion:

Production outputs

                    Luxland    Leanderland

Chips                10                4

Pretzels            10                8

Total output    20               12

Answer:

Assuming that Luxland and Leanderland specialize and trade in a way that is advantageous for both of them, the number of pretzels that Leanderland can produce will be 16.

Explanation:

a) Data and Calculations:

Specialization Output:

                    Luxland    Leanderland

Chips                20                0

Pretzels              0                16

Total output     20                16

b) While it is acknowledged that Luxland has absolute advantage in the production of both chips and pretzels when compared to Leanderland, the total output for both economies, without specialization, remains 32 units (of both chips and pretzels).  When they specialize, Leanderland's output increases to 16 units from 12.  This results in total output of 36 units instead of 32 for both economies.

8 0
2 years ago
Which savings account will earn you the least money?
ddd [48]

The savings account that would earn the least amount of money is the account that earns a simple interest monthly.

<h3>What does simple interest and compound interest mean?</h3>

Simple interest rate is the interest that is paid only on the principal portion of a loan. This means that the debtor does not pays interest on the interest rate already accrued. This differs from compound interest where the debt holder pays interest on the principal and the interest rate already accrued.

This means that an account that earns a compound interest would have a higher yield when compared with an account that earns a simple interest.

To learn more about compound interest, please check: brainly.com/question/26367706

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2 years ago
Which of the following phrases is an example of structural que ?
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Answer:

excuse me but where is the phrase?

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Explain two situations where scarcity effects you
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