Answer:<u> </u><u><em>Relevant cost of new preferred stock = 10.53%</em></u>
Explanation:
Given:
Dividend = $4.00 per share
Selling for = $40 per share.
Flotation costs = 5% of the selling price.
Marginal tax rate is 30%.
We can compute the cost of new preferred stocks using the following formula:
∴ Relevant cost of new preferred stock = 10.53%
Therefore, the correct option is (d)
Answer:
The US dollar is worth more value than INR.
Explanation:
The US dollar is worth more value than INR under flexible exchange rate system, quantity of dollar supplied exeed the quantity of dollar demanded. There are multiple factors which affect the valuation of currency. One of the factor is purchasing power parity, as it show the strength of domestic economy. Inflation is another factor affecting the currency of the nation, higher inflation rate lead the value of currency go down.
Answer:
Following is attached the solution to each part of the given question.
I hope it will help you a lot!
Explanation:
Answer:
b. The expected rate of return on U.S. assets rises
Explanation:
- An open economy is one that interacts freely with the other economies of the world, the one economy of the united states is very large and includes the imports and exports of huge quantity including the goods and services.
- In an open economy, macroeconomic model assets are bought and supplied to the economy a this creating an outflow of the capital as more of the buying of the assets creates a net capital outflow leading to an increase of the expected rate of return of assets. As the country can spend more than it produces.
