Answer: interest tax shield
Explanation: A tax shield is a reduction in taxable income for an individual or corporation achieved through claiming allowable deductions such as mortgage interest, medical expenses, charitable donations, amortization, and depreciation .
The term “interest tax shield” refers to the reduced income taxes brought about by deductions to taxable income from a company’s interest expense. For instance, there are cases where mortgages may have an interest tax shield for buyers since the mortgage interest is deductible against income. One of the main objectives of companies is to reduce their tax liability as much as possible. Interest tax shields encourage firms to finance projects with debt, since the dividends paid to equity investors are not deductible.
<span>The equilibrium price will go down and equilibrium quantity will be indeterminate.
Bumper crop refers to a situation when a certain type of crop exeprience sudden bump in productivity. If at that exact time more people become allergic to this crop, the crop would be overly stocked in the warehouse and the owner would most likely sell it at lower price.</span>
Answer:
8.3%
Explanation:
Real risk - free rate of interest ( k* ) = 4%
Inflation for next four ( 4 ) years = 2% per year
Inflation rate after four years = 5%
maturity risk premium = 0.1 ( t - 1 )%
<u>Determine Yield on a 10-year Treasury bond </u>
t = bond's maturity
Yield = Real risk - free rate + maturity risk premium + inflation rate
Inflation rate for 10 years = ( 4 + 30 ) / 10 ) % = 3.4%
Yield = 4% + 0.1(10- 1)% + 3.4
= 4% + 0.9% + 3.4%
= 8.3%
Answer:
Correct answer: "Option: A".
Explanation:
A prediction of the marginal utility theory states that the rise in the price of the goods may lead to an increase in the marginal utility from the consumption of goods.
It is because, with the rise in the price of the goods, the movement is upward along the demand curve, which means that a decrease in the quantity demanded related to the goods, will lead to an increase in the marginal utility.
