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3 years ago

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

1 answer:

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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Answer: D. 500

Explanation:

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It is calculated by the formula below,

EOQ = √ (2 * Annual demand * Ordering Cost / Holding Cost)

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The economic ordering quantity (EOQ) for this item is 500 units.

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3 years ago

Explain why employers are considered buyers of skills and employees sellers of skills in the labour market.

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Answer:

13,500

Explanation:

Outstanding shares = issued shares - Treasury shares

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Outstanding shares are the total number of shares sold to investors

Treasury shares are shares that have been issued and later repurchased by the company

Issued shares are the shares that a company issues

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Learn more about administrative purposes here:

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2 years ago