Answer: High income countries with larger governments as a share of GDP have generally grown at a slower rate than the countries with smaller governments.
Explanation: Developing countries or countries with less money typically grow at a faster rate than higher income countries because returns related to capital are not as strong. In richer countries, they have higher capital and tend to grow at a slower rate.
Answer:
The WACC before bond issuance is 3.9% and the WACC after bond issuance is 3.71%
Explanation:
In order to calculate the WACC before bond issuance
, we would have to calculate first the cost of equity using capital asset pricing model
.
So Using CAPM we have Rf + Beta x Market risk premium
=
0.5% + 0.85 * 4%
= 3.9%
. cost of equity
Therefore WACC before bond issuance = (Cost of equity x weight of equity + cost of debt (1-tax) x weight of debt)
= 3.9%
. WACC before bond issuance will be equal to cost of equity in this case as there is no debt issue.
In order to calculate the WACC after bond issuance we make the following calculation:
WACC after bond issuance = (Cost of equity x weight of equity + cost of debt (1-tax) x weight of debt)
= (3.9% x 0.9) + (2% x 0.1)
= 3.51% + 0.2%
= 3.71%
A. A sole proprietorship <span>is the type of business ownership that has the highest personal liability risk. You are on your own there, and if you make a mistake, the who business fails. </span>
Answer & Explanation
Monopoly is where in the market there is only one seller in the market has a certain product where no other seller has. It my be goods or services but there is no substitute. This means that the owner of such a product is in full control of his/her supply. The main or the greatest impact of monopoly in the market may favors the the seller only while on the other the side the consumer may be pressed. This mostly occurs when it comes to pricing because a monopoly has potential to rise prices. This is due to lack of competition in the market. An example of monopoly in the united states in the past was :
Standard Oil company - This was an oil producing company which was producing,transporting,refining and marketing oil. It was incorporated under Standard Oil Trust which handled all oil production, transportation, refinement, and marketing. Holds 91% of oil production and 85% of its final sales in the United States Market in the early 1900s. The main sources of of monopoly were that to join into a certain industry it was very expensive so this became a main barrier.
Answer: $160,000
Explanation: Retained earnings can be defined as the amount pf earnings left with the company after taking into consideration all tyoes of dividends and taxes.
formula :-
Retained earnings = previous retained earnings + net income - dividends to equity holders - dividends to preference holders
thus,
Retained earnings = $140,000 + $65,000 - $10,000 - $35,000
= $160,000
