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Otrada [13]
3 years ago
13

A bank's commitment (for a specified future period of time) to provide a firm with loans up to a given amount at an interest rat

e that is tied to a market interest rate is called
A) credit rationing.B) a line of credit.C) continuous dealings.D) none of the above.
Business
1 answer:
sladkih [1.3K]3 years ago
8 0

Answer:

credit rationing

Explanation:

Credit rationing is a situation in which borrowers give out a fixed amount of loan to lenders for a specified time at a rate tied to the market interest rate. In this situation, loans do not exceed a certain amount from the borrower no matter what attractive offers are given by the lenders to be able to get a larger loan amount. This is done by the borrower becasue the borrower is earning maximum profits from interest rates and also  is a means to maintain equilibrum between loan funds and loan demands.  

Cheers.

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How did the economic policies of the republican controlled congress redefine the character of the federal government?
leva [86]
Economic policies of the Republican controlled congress redefined the character of the federal government by changing <span> the way it was viewed as by implementing Clay's program and creating an integrated national banking system that won support by farmers, workers and entrepreneurs that bolstered the Union's ability to fight a long war. Hope this answer helps.</span>
7 0
3 years ago
Trendsetters has a cost of equity of 14.6 percent. The market risk premium is 8.4 percent and the risk-free rate is 3.9 percent.
Karolina [17]

Answer:

The answer is option ( C.) Increase of 1.06 percent

Explanation:

Data provided in the question:

Cost of equity = 14.6%

Market risk premium = 8.4%

Risk-free rate = 3.9%

Company's beta = 1.4

Now,

Expected Return = Risk-free rate + ( Beta × Market risk premium )

= 3.9% + ( 1.4 × 8.4% )

= 3.9% + 11.76%

= 15.66%

Therefore,

The change in firm's cost of equity capital = 15.66% - 14.6%

= 1.06%

Hence,

The answer is option ( C.) Increase of 1.06 percent

5 0
3 years ago
Frasier Cabinets wants to maintain a growth rate of 5 percent without incurring any additional equity financing. The firm mainta
KATRIN_1 [288]

Answer:

Option E is correct. Pay out ratio is 73.74 %

Explanation:

Payout ratio shows how much portion of the net earning the company pay to its shareholders in form of cash dividend. Higher pay out ratio implies that company pay large portion of its earning to shareholder.

Mathematically, pay out ratio is = 1 - Retention Ratio ------ (a)

Retention ration shows portion of the earning that the company has retained for future investment or operation or growth.

Given data

Growth rate = 5 % or 0.05

Debt to equity ratio = 0.55

Assets turn over = 1.30

Profit Margin = 9 % or 0.09

Retention ration can be calculated from sustainable growth ratio formula.

Sustainable growth rate = Retention ratio x Return on equity

Sustainable growth rate means the growth rate that the company wants to maintain in future.

Retention ratio = Sustainable growth rate / Return on equity ---- (b)

Return on equity is not given the question but it can be calculated from Du Pont equation.

According to Du Pont equation,

Return on Equity = Profit Margin x Assets Turn Over x Financial leverage

Return on Equity = 0.09 x 1.30 x ( 1 + 0.55) = 0.18135

Let r be retention ratio, Then

Sustainable growth rate = (0.18135 x r)/ ( 1- (0.18135 x r))

0.05 = (0.18135 x r)/ ( 1- (0.18135 x r))

r = 0.2626 = Retention ratio

Putting the value of retention ratio in equation (a)

Payout ratio = 1 - Retention ratio = 1 - 0.2626 = 0.7374 or 73.74 %.

 

4 0
3 years ago
A firm can effectively use its operations function to yield competitive advantage through all of the following except
ira [324]

Answer:

The correct answer is b.setting equipment utilization goals below industry average.

Explanation:

A firm cannot achieve competitive advantage by setting its equipment utilization goals as this will not retain its customers.

If a firm wants to achieve competitive advantage it can achieve it by;

Addressing its customers concerns and customizes the products according to their needs.  

Providing customers their ordered products earlier than other companies lead time, which means increase in speed of delivery and shortens the delivery time.

Bring improvement and advancements in its products by using new technology.

Maintain a variety of different product options to cater the needs of its various customers. Offering them a wide range of products will probably reduce chances of customer switch.

4 0
3 years ago
Department stores are most likely characterized by ________. Group of answer choices wide varieties of product lines predatory p
AURORKA [14]

Answer:

brands specialty

Explanation:

4 0
3 years ago
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