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Licemer1 [7]
3 years ago
15

Although the real assets constitute the true productive capacity of an economy, it is hard to conceive of a modern economy witho

ut well-developed financial markets and security types.
How would the productive capacity of the US economy be affected if there were no markets in which to trade financial assets?
Business
1 answer:
Liula [17]3 years ago
8 0

Answer:

Productive capacity of an economy is a function of the real assets of the economy. Real assets include plant, machinery and knowledge used to generate goods and services. Whereas financial assets are individual's claims on income generated by real assets.

Advantages of Financial assets:

  • Financial assets help large firms to raise the capital required to finance their investments projects in real assets.
  • Trading in financial assets help maintaining a lower cost of capital as financing through financial assets is easier.
  • Lower cost of capital would attract more investments.

All these benefits of financial assets will disappear in the absence of trade markets for financial assets. Absence of such markets will result in higher cost of capital as financial assets will no longer be available for various business expansion and investment projects.

Therefore, productive capacity of U.S. economy would be affected adversely if there were no trade markets for financial assets.

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A convertible debenture can never sell for more than its conversion value or less than its bond value.
erik [133]

Answer:

b. False

Explanation:

A convertible debenture can sell for more than its conversion value or less than its bond value.

6 0
2 years ago
During 2021, its first year of operations, a company provides services on account of $257,000. By the end of 2021, cash collecti
Dmitrij [34]

Answer:

Debit Bad debt expense $15,120

Credit Allowance for doubtful debt $15,120

Being entries to record estimated bad debts

Explanation:

When a company makes sales on account, debit accounts receivable and credit sales. Based on assessment, some or all of the receivables may be uncollectible.  

To account for this, debit bad debit expense and credit allowance for doubtful debt. Should the debt become uncollectible (i.e go bad), debit allowance for doubtful debt and credit accounts receivable.

Where a debit that had previously been determined to have gone bad gets settled, debit cash and credit bad debt expense.

Account receivables balance as at year end

=  $257,000 - $131,000

= $126,000

Allowance for doubtful debt = 12% * $126,000

= $15,120

4 0
3 years ago
g Donald’s employer fires Donald after only four months on the job, a clear breach of Donald’s written twelve-month employment c
insens350 [35]

Answer:

Compensatory Damages

Explanation:

Based on this scenario it can be said that Donald is entitled to Compensatory Damages. This is a lawsuit that covers the loss that the non-breaching party incurred as a result of the breach of contract. In this scenario, Donald's employer breached the contract by firing Donald before the twelve months. Therefore Donald can sue for compensatory damages which would be the amount of money that he would have made in the rest of the twelve months.

8 0
3 years ago
Who is he and what’s his product
guajiro [1.7K]

Answer:

Steve Jobs and he was the CEO of apple

Explanation:

so his products would be iphones, ipads, mac books, etc

3 0
2 years ago
Mariano Manufacturing can issue a 25-year, 8.8% annual payment bond at par. Its investment bankers also stated that the company
aivan3 [116]

Answer: 10.13%

Explanation:

The after-tax return on the preferred shares would be:

= After-tax return + Premium required

= (8.8% * (1 - 25%)) + 1%

= 7.6%

For the preferred stock to be issued at par with the above after tax return:

= After tax return / ( 1 - tax)

= 7.6% ( 1 - 25%)

= 10.13%

4 0
2 years ago
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