1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
IgorLugansk [536]
3 years ago
15

When the interest rate increases, the opportunity cost of holding money Select one: a. decreases, so the quantity of money deman

ded increases. b. decreases, so the quantity of money demanded decreases. c. increases, so the quantity of money demanded decreases. d. increases, so the quantity of money demanded increases.
Business
2 answers:
LenaWriter [7]3 years ago
6 0

Answer: c. increases, so the quantity of money demanded decreases.

Explanation: The quantity of money demanded increases and decreases with fluctuations in interest rate which can be seen as the price of money/the cost of borrowing money. An increase in the interest rate increases the opportunity cost of holding money and leads to a reduction in the quantity of money demanded this is because quantity of money demanded varies inversely with the interest rate. The Central Bank of a country adjusts interest rates to keep inflation, the demand for money, and the health of the economy in a certain range.

Arada [10]3 years ago
4 0

Answer:

C.

Explanation:

A higher interest rate means greater loss in money value being held by an individual. This is because the money would yield higher earnings by being in a savings account. Consequently, higher interest rate means less demand for money.

You might be interested in
R.S. Green has 250,000 shares of common stock outstanding at a market price of $28 a share. Next year’s annual dividend is expec
zhannawk [14.2K]

Answer:

WACC 6.18%

Explanation:

to get the cost of capital we solve using the gordon model:

\frac{divends}{return-growth} = Intrinsic \: Value

\frac{divends}{Price} = return-growth

\frac{divends}{Price} + growth = return

$Cost of Equity =\frac{D_1}{P)} +g

D1 1.55

P 28

f 0.00

g 0.02

$Cost of Equity =\frac{1.55}{28} +0.02

Ke 0.075357143

Then for the cost of debt, we need to calculate the YTM of the bonds:

which is the rate at which the present value of the coupon payment and maturity equals the market price:

For the complexity this is done with excel or a financial calculator there is also an approximation formula

YTM with excel: 0.073516565

now that we good this we need to determinate the weigth of equity and debt:

250,00 shares x 28 dollars each = 7,000,000

1,500 bonds of $1,000 each at 98% = 7,350,000

value of the company: 7,000,000 + 7,350,000 = 14,350,000

Ew: 7,000,000 / 14,350,000 = 0.487804878

Dw: 7,350,000 / 14,350,000 =0.512195122

Now we got all values and we can determinate the WACC:

WACC = K_e(\frac{E}{E+D}) + K_d(1-t)(\frac{D}{E+D})

Ke 0.075357143

Equity weight 0.487804878

Kd 0.074

Debt Weight 0.512195122

t 0.34

WACC = 0.075357143(0.48780487804878) + 0.074(1-0.34)(0.51219512195122)

WACC 0.0617752 = 6.18%

7 0
3 years ago
How many inches are there in a football field (100 yards)? 1 yard = 3 feet; 1 foot = 12 inches
crimeas [40]

4320 .  this prob would have been answered faster under the mathmatics topic


8 0
3 years ago
Shamrock, Inc. purchases land for $490000 cash. The clinic assumes $5300 in property taxes due on the land. The title and attorn
Leviafan [203]

Answer:

$504,300

Explanation:

The total cost of the land that Shamrock Inc. purchased has to include:

  • the actual price paid for the land: $490,000
  • legal fees and real estate commissions: $2,600
  • taxes due and permits, zoning fees, etc: $5,300
  • site preparation (includes land grading): $6,400

The total cost of the land is: $504,300

3 0
3 years ago
What is the document that the marketing researcher pledges to deliver as a result of the marketing research process?
dezoksy [38]

Answer: Marketing research proposal

Explanation: A marketing research proposal simply means a detailed outline of market research plan. It entails the processes involves in the research study which includes the aims and objectives of the market research which is included in the problem statement, Developing ways to solve the identified problem, Formulating the design or model for the research, collection of required data (both qualitative and quantitative) , data preparation, cleansing and analysis and Report preparation and presentation.

3 0
2 years ago
Identify an industry with high fixed costs in the short run
Ganezh [65]

The answer is: Car manufacturers

An industry that have high fixed costs in the short run would be the industry that has to put a high price tag for their products.

Car manufacturers need to provide a high number of capital on the early stage of investments to purchase machines and factory spaces that essential for the efficiency of the production. Due to this hard requirements, there is very little new company enter the competition in car manufacture industries in recent centuries.

6 0
3 years ago
Other questions:
  • Why would a business replace human capital with physical captain
    9·1 answer
  • A credit score between 500 and 600 means a consumer would most likely
    9·2 answers
  • How would a computer enhance the productivity of a business
    5·2 answers
  • As the manager of new restaurant with new employees, Pat began by being very directing so that all the employees knew what to do
    12·1 answer
  • On January 1, 2012, Albert invested $6,000 at 8 percent interest per year for three years. The CPI (times 100) on January 1, 201
    6·1 answer
  • Garcia Industries has sales of $200,000 and accounts receivable of $18,500, and it gives its customers 25 days to pay. The indus
    11·1 answer
  • Match the definition with the correct type of unemployment. Not all items will be used.
    9·1 answer
  • The Draper Company is considering dropping its Doombug toy due to continuing losses. Revenue and costs data on the toy for the p
    11·1 answer
  • In general, the production and use of capital ________ the productivity of labor and normally ________ wages.
    12·1 answer
  • Who want to teach me for be a hacker <br> im a good boy
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!