Answer:
A. low; low
Explanation:
Value stocks usually exhibit low price-to-book ratios and low price-to-earnings ratios
Answer:
No, the second car shouldn't be purchased.
Explanation:
After buying the first car, when second car is to be brought the marginal benefit is lower than marginal cost. So, only one car should be brought.
Answer:
Simply because tax-deferred accounts are taxed only when the investor receives or withdraws money from them. For example, a 401 (K)'s interest and capital gains are not taxed until the beneficiary retires and starts to receive payments, and that may take a long time.
It is not the same to be taxed immediately, because that reduces the amount invested. For example, you invest have $100 to invest and your income tax rate is 22%.
- a tax-deferred account that earns 5% per year will earn $5, and then the principal will increase to $105 for the next, and keep earning more money.
- a taxable account will only have a $78 after taxes are paid, and if it earns 5%, then it will only earn $3.90 at the end of the year, and the principal will increase to $81.90.
Answer:
A) taxable as ordinary income to the employee and can be taken as a deduction by the employer.
Explanation:
When an employee defers to receive the compensation plan he gets the benefit of lower tax bracket each year, ultimately decreasing his tax liability.
Further when he receives the complete amount his income stands taxable. Accordingly at that time ordinary tax rates as per FICA are applicable.
On the employers part it is only deductible when the employee includes it in the income of the year, and pays tax on such compensation received.
Thus, when he receives it as compensation on retirement it is normally taxable at ordinary rates to the employee and deduction can be claimed by the employer.
Answer:
Increase
Explanation:
Bonds refer to medium of raising long term finance whereby the issuer agrees to pay periodic coupon payments and principal repayment upon maturity to the lenders.
Bond ratings convey the credit risk a bond carries. For instance, AAA rating is considered to be the best rating followed by AA, etc. Such ratings depict the credit worthiness of the bond issuer.
Higher or better the credit rating, more popular the bonds would be, lesser would be the investment risk and thus more would be their demand.
In the given case, the bonds which were initially rated BBB have been upgraded to AA. This would result into an increase in the demand for such bonds.
