The preferred stock effect is not a notion that can be used to explain abnormally high excess stock returns.
<h3>What is the preferred stock?</h3>
The term "stock" refers to a company's ownership or equity. Common stock and preferred stock are the two forms of equity. Preferred investors are entitled to more dividends or asset distributions than common stockholders. The specifics of each preferred stock vary depending on the issuance.
When it comes to dividends, preferred stockholders have a preference over ordinary stockholders, which typically yield more than common shares and might be paid monthly or quarterly. These dividends can be fixed or determined by reference to a benchmark interest rate, such as the London Interbank Offered Rate.
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Assuming the marginal propensity to consume (MPC) for a nation is 0.67. The tax multiplier for this nation is: 2.03.
<h3>Tax multiplier</h3>
Using this formula
Tax multiplier=-MPC/1-MPC
Where:
Marginal propensity to consume (MPC)=0.67
Let plug in the formula
Tax multiplier=0.67/1-0.67
Tax multiplier=0.67/0.33
Tax muitiplier=2.03
Inconclusion the tax multiplier for this nation is: 2.03.
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It would give me the impression that you’re not interested in the interview. If someone walked into an interview while doing the above personally I would see them as “having better things to do”
Anyways, Hope this somehow helps!
Answer:
Bribery in the world of business typically happens when an organization or representative of an organization gives financial benefits to an official to gain favor or manipulate a business decision - True.
Bribery is the giving or offering of items of value (especially money) to a government official in exchange for favorable treatment. Bribing is unethical and illegal, but it is common practice in many countries, so common that it is expected.
The Foreign Corrupt Practices Act was implemented in the aftermath of disclosures that businesses were violating the IMA Code of Ethics - True.
In the seventies, U.S. Government investigations found that hundreds of U.S. companies operating abroad had turned to bribery in order to gain the favor of foreing officials. This conduct is related to the statement explained above: bribery is pervasive in many countries around the world.
Managers are required to follow specific rules issued by the IMA for internal financial reporting. - False.
The IMA Code of Ethics does not provide specific rules for financial reporting (these specific rules are found instead either in the Generally Accepted Accounting Principles (GAAP) or in the or in the International Financial Reporting Standards (IFRS)).
The IMA Code of Ethics instead provides principles, or ethical guidelines, to be followed by participants in the management accounting profession.
Ethics is more than obeying laws - True.
Ethics goes beyond what is legally right, and is more related to what is morally right. An ethical person should do the right thing even if there is no legal code explicitely telling him to do so.
The Sarbanes-Oxley Act addressed public company accounting reform. - True
This act added requirements for public accounting firms, and included legal penalties including possible jail time for certain types of misconduct. The Act was enacted following major accounting scandals such as Enron.
The weighted average cost of capital (WACC) for ABC Limited is 12.63%
The weighted average cost of capital(WACC) of a firm is the average cost of finance incurred by the firm on all its sources of finance.
It is determined as the sum of the cost of each source of finance multiplied by their respective weights in the firm's capital structure.
By weights, I mean the percentage of funding each source contributes to the total finance available at the firm's disposal.
WACC=(weight of equity*cost of equity)+(weight of mezzanine finance*cost of mezzanine finance)+(weight of debt*cost of debt)
weight of equity=equity finance/total finance
cost of equity=15%
weight of mezzanine finance=mezzanine finance/total finance
cost of mezzanine finance=9.5%
weight of debt of finance=debt finance/total finance
total finance=$5m+$2m+$1m
total finance=$8m
WACC=($5/$8*15%)+($2/$8*9.5%)+($1/$8*7%)
WACC=12.63%
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