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kolbaska11 [484]
3 years ago
8

Why do firms generally prefer to borrow funds to obtain long-term financing rather than issue shares of stock?

Business
1 answer:
Juli2301 [7.4K]3 years ago
4 0
The more firms get from obligation as opposed to issuing stocks, the more it can diminish the aggregate cost of capital in light of the fact that the enthusiasm from obligation is duty deductible which will help reduce the aggregate cost of capital. In any case, no firm can get from obligation everlastingly in light of the fact that, at one point in time, extra obligation financing will make the aggregate cost of capital increment rather than decline. So firms will get in view of their own enhanced capital structure to limit the aggregate cost of capital however much as could reasonably be expected. Also, in light of this upgraded capital structure, there is a point of confinement to how much a firm can keep getting from obligation.
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A company just starting business made the following four inventory purchases in June: June 1 150 units $ 390 June 10 200 units 5
melomori [17]

Answer:

Ending inventory cost= $599

Explanation:

Giving the following information:

June 1 150 units $ 390 (2.6)

June 10 200 units 585 (2.93)

June 15 200 units 630 (3.15)

June 28 150 units 495 (3.3)

Ending inventory in units= 200

<u>To calculate the ending inventory, first, we need to calculate the average price:</u>

Average price= (2.6 + 2.93 + 3.15 + 3.3) / 4= $2.995

<u>Now, the ending inventory:</u>

Ending inventory= 2.995*200

Ending inventory= $599

8 0
3 years ago
G.R. Dry Foods Distributors specializes in the wholesale distribution of dry goods, such as rice and dry beans. The firm’s manag
slamgirl [31]

Answer:

d. The price will decrease, because dry beans and rice are inferior goods.

Explanation:

the options are missing, so I looked them up:

a. The price will decrease, because dry beans and rice are normal goods.

b. The price will increase, because dry beans and rice are normal goods.

c. The price will increase, because dry beans and rice are inferior goods.

d. The price will decrease, because dry beans and rice are inferior goods.

Inferior goods are those goods whose quantity demanded decreases as consumer income increases. This happens because inferior goods have several substitute products that cost more, but as consumer income increases, consumers will tend to purchase the more expensive substitute goods instead of the cheaper inferior ones. I.e. as consumer income increases, they will seek to purchase higher quality goods, and inferior goods are generally low quality goods that are mostly purchased by people located at the lower socio-economic classes. Other examples of inferior goods are canned meat, instant noodles and cheap frozen foods.

Since the quantity demanded of inferior goods decreases as the economy improves, the demand curve shifts to the left, which will result in a lower equilibrium price.

7 0
3 years ago
Which of the following is a good conductor of electricity? A. Glass B. Plastic C. Rubber D. Wet skin
EastWind [94]

Conductors have free electrons and they conduct electrical current very easily.

Good conductors are the following materials: copper, aluminum, gold, and silver. Glass, air, plastic, rubber, and wood on the other hand are insulators .

From the given options, only wet skin (answer D) is a good conductor of electricity.

8 0
3 years ago
Read 2 more answers
The Gingham Company's budgeted income statement reflects the following amounts:
aleksklad [387]
:0/0:0 even h i’d s a square tune quar an tine is bad
6 0
3 years ago
The Balance Sheet reports assets, liabilities, and stockholders' equity at a specific date. A : True B : False
marysya [2.9K]

Answer:

A. True

Explanation:

Balance sheet: The assets, liabilities, and equity of stockholders are recorded in the balance sheet. The accounting equation which is shown below is used

In this:

Total assets = Total liabilities + Stockholder equity

The balance sheet debit and credit side should be fair, equal and balanced.  

In addition, it is always prepared on the date specified.

7 0
3 years ago
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