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emmasim [6.3K]
4 years ago
5

What is a credit​ spread? A. The difference between the net worth of a borrower and the amount of the loan the borrower would li

ke to secure. B. The difference between a​ borrower's credit score and the score of the most​ credit-worthy borrower. C. The difference between interest rates on loans to households and businesses and interest rates on completely safe assets such as U.S. Treasury bonds. D. The difference between the interest rate on corporate bonds with different maturities.
Business
1 answer:
agasfer [191]4 years ago
4 0

Answer: Option C

                                 

Explanation: In simple words, credit spread refers to the yield between two bonds having same maturity but different credit quality.

The interest rate on bonds given to households and business are not safe as they'er is a high probability of payment loss but treasury bonds are safe as it have guarantee of Government of the country.

Hence the correct option is C.

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Knox, president of Quick Corp., contracted with Tine Office Supplies, Inc., to supply Quick’s stationery on customary terms and
andreev551 [17]

Answer:

D.

Explanation:

Based on the scenario being described within the question it can be said that the Quick’s contract with Tine is valid because the contract is fair to Quick.  Therefore, the fact that Knox is a majority shareholder in Tine does not complicate the deal. If the deal was made to be more fair to Tine then this information can cause a complication, and even make the contract void.

4 0
3 years ago
Fisher Company has 1,000,000 share of common stock with a par value of $10. Additional paid-in capital totals $10,000,000 and re
aleksley [76]

Answer:

B. $300,000

Explanation:

The computation of the reduction of retained earning amount is shown below:

= Number of shares of common stock × stock dividend percentage × market value

= 1,000,000 shares × 6% × $5

= $300,000

Since the dividend amount is adjusted while computing the ending balance of retained earning balance and the same is to be considered in the computation part.

All other information which is given is not relevant. Hence, ignored it

8 0
3 years ago
A company’s dividend is expected to grow at 20% for the next six years. After that, the growth is expected to be 3% forever. If
Fittoniya [83]

Answer:

Price of share at end of year 6 = $43.94

Explanation:

Provided information we have,

Current dividend = $1

Growth rate for 6 years = 20%

Dividend at end of year 6 = $1 \times Future value factor of $1 @ 20%  for 6 years = $1 \times 2.985984 = $2.986 rounded off

After this dividend is supposed to grow at 3% thus Dividend at end of year 7 = $2.986 + 3% = $3.076

Therefore, using dividend growth model we have,

P_6 = \frac{D_7}{Ke - g}

Where P6 = price at end of period 6 = to be calculated

D7 = Dividend paid at end of year 7 = $3.076

Ke = Required rate of return = 10%

g = constant growth rate = 3%

Thus, P_6 = \frac{3.076}{0.10-0.03}

P6 = $43.94

Thus, price of share at end of year 6 = $43.94

4 0
3 years ago
Canyon Tours showed the following components of working capital last year: Beginning of YearEnd of Year Accounts receivable$ 25,
Scilla [17]

Answer:

a. - $3,200

b. $15,200

Explanation:

The computation of the working capital for both the years is shown below:

Beginning of Year

= Accounts receivable + inventory - accounts payable

= $25,400 + $12,700 - $15,200

= $22,900

End of year

= Accounts receivable + inventory - accounts payable

= $23,700 + $13,900 - $17,900

= $19,700

So, the change in net working capital

= $22,900 - $19,700

= - $3,200

b. The computation of the  cash flow for the year is shown below:

= Sales - costs - change in working capital

= $36,700 - $24,700 - (-$3,200)

= $15,200

4 0
3 years ago
what situation is occurring if a 1 percent decrease in price results in more than a 1 percent increase in quantity demand?
Mekhanik [1.2K]

Demand is price elastic, is occurring if a 1 percent decrease in price results in more than a 1 percent increase in quantity demand.

<h3>What is price elastic?</h3>

Price elastic of demand means the measurement of the product's demand with respect to its price.

It is common that if the price of a product will increase, the demand will fall, but some products demand fall more than other products, which is measure by price elastic in demand.

Thus, the correct option is demand is price elastic.

Learn more about demand is price elastic.

brainly.com/question/20630691

#SPJ4

3 0
2 years ago
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