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3 years ago

Covenants represent:

Business

1 answer:

gregori [183]3 years ago

8 0

Answer:

the answer is D terms and conditions set forth in a lending agreement to reduce the probability of non-payment

Explanation:

covenants help lenders detect deteriorating loan quality.

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Discuss special considerations for using blogs and wikis in research

snow_tiger [21]

<span>While most people consider blogs and wikis to be less than credible, in fact a lot can be learned from them. These types of sites are set up so anyone with access to the Internet can contribute, and make their thoughts and ideas public. Wikis are mostly factual accounts; while there may be some facts included, for the most part blogs consist of opinions and experiences.</span>

6 0

4 years ago

If the average propensity to consume is 0.75, and the marginal propensity to consume is 0.70, if income rises by $4,000, consump

LUCKY_DIMON [66]

Answer:

$2,800

Explanation:

The computation of the increase in consumption is shown below:

= Marginal propensity to consume × rise in income

= 0.70 × $4,000

= $2,800

Hence, the consumption would be increased by $2,800

We simply applied the above formula i.e. marginal propensity to consume is multiplied with the rise in income so that the correct answer could come

7 0

3 years ago

Suppose that the market demand curve for bean sprouts is given by P = 1,660 - 4Q, where P is the price and Q is total industry o

a_sh-v [17]

Answer:

In equilibrium, total output by the two firms will be option e= 300.

Q = $q_{1}$ + $q_{2}$

Q = 100 + 200

Q = 300

Explanation:

Data Given:

Market Demand Curve = P = 1660-4Q

where, P = price and Q = total industry output

Each firm's marginal cost = $60 per unit of output

So, we know that Q = $q_{1}$ + $q_{2}$

where $q_{}$ being the individual firm output.

Solution:

P = 1660-4Q

P = 1660- 4( $q_{1}$ + $q_{2}$ )

P = 1660 - 4 $q_{1}$ - 4 $q_{2}$

Including the marginal cost of firm 1 and multiplying the whole equation by $q_{1}$

Let's suppose new equation is X

X = 1660 $q_{1}$ - 4 $q_{1} ^{2}$ - 4 $q_{1}$ $q_{2}$ - 60 $q_{1}$

Taking the derivative w.r.t to $q_{1}$ , we will get:

$X^{'}$ = 1660 - 8 $q_{1}$ - 4 $q_{2}$ - 60 = 0

Making rearrangements into the equation:

8 $q_{1}$ + $q_{2}$ = 1660 - 60

8 $q_{1}$ + $q_{2}$ = 1600

Dividing the whole equation by 4

2 $q_{1}$ + $q_{2}$ = 400

Solving for $q_{1}$

2 $q_{1}$ = 400 - $q_{2}$

$q_{1}$ = 200 - 0.5 $q_{2}$

Including the marginal cost of firm 1 and multiplying the whole equation by $q_{2}$

P = 1660 - 4 $q_{1}$ - 4 $q_{2}$

Let's suppose new equation is Y

Y = 1660 $q_{2}$ - 4 $q_{1}$ $q_{2}$ -4 $q_{2} ^{2}$ - 60 $q_{2}$

Pugging in the value of $q_{1}$

Y = 1660 $q_{2}$ - 4 $q_{2}$ (200 - 0.5 $q_{2}$ ) -4 $q_{2} ^{2}$ - 60 $q_{2}$

Y = 1660 $q_{2}$ - 800 $q_{2}$ +2 $q_{2} ^{2}$ -4 $q_{2} ^{2}$ - 60 $q_{2}$

Y = 1600 $q_{2}$ - 800 $q_{2}$ -2 $q_{2} ^{2}$

Taking the derivative w.r.t $q_{2}$

$Y^{'}$ = 1600 - 800 - 4 $q_{2}$ = 0

Solving for $q_{2}$

4 $q_{2}$ = 800

$q_{2}$ = 200

$q_{1}$ = 200 - 0.5 $q_{2}$

Plugging in the value of $q_{2}$ to get the value of $q_{1}$

$q_{1}$ = 200 - 0.5 (200)

$q_{1}$ = 200 - 100

$q_{1}$ = 100

Q = $q_{1}$ + $q_{2}$

Q = 100 + 200

Q = 300

Hence, in equilibrium, total output by the two firms will be option

e= 300.

5 0

3 years ago

The company estimates that it can issue debt at a rate of rd = 9%, and its tax rate is 40%. It can issue preferred stock that pa

klio [65]

Answer:

Cost of debt (after tax) = 5.4%

Cost of preferred stock ( $r_p$ ) = 10.53%

Cost of common stock ( $r_e$ ) = 16.18%

WACC = 14%

project 1 and project 2

Explanation:

Given that:

Debt rate ( $r_d$ ) = 9% = 0.09

Tax rate (T) = 40% = 0.4

Dividend per share ( $D_p$ ) = $6

Price per share ( $P_p$ ) = $57

Common stock price ( $P_0$ )= $39

Expected dividend ( $D_1$ ) = $4.75

Growth rate (g) = 4% = 0.04

The target capital structure consists of 75% common stock ( $w_e$ ), 15% debt ( $w_d$ ), and 10% preferred stock ( $w_p$ )

Cost of debt (after tax) =` $r_d(1-T)= 0.09(1-0.4)=0.09*0.6=0.054$

Cost of debt (after tax) = 5.4%

Cost of preferred stock ( $r_p$ ) = $\frac{D_p}{P_P}=\frac{6}{57}=0.1053$ = 10.53%

$r_p$ = 10.53%

Cost of common stock ( $r_e$ ) = $\frac{D_1}{P_0} +g=\frac{4.75}{39} +0.04=0.1618$

$r_e$ = 16.18%

$WACC=w_dr_d(1-T)+w_er_e+w_pr_p\\WACC=0.15*0.09(1-0.4)+0.75*0.1618+0.1*0.1053=0.14$

WACC = 14%

c) Only projects with expected returns that exceed WACC will be accepted. Therefore only project 1 and project 2 would be accepted

4 0

3 years ago

Common misconception about entrepreneurship

Y_Kistochka [10]

Answer:

1. Entrepreneurs can only be successful if they have large funding backing them.

2. Entrepreneurs have cushy hours.

3. Entrepreneurs have to do everything themselves.

5. Entrepreneurs have to take huge risks.

7. Entrepreneurs are never stressed out.

8. Entrepreneurs are all wealthy.

9. Entrepreneurs are their own boss.

10. Entrepreneurs have more personal time.

4 0

3 years ago