Answer: D. marginal product; increasing; average variable cost; decreasing
Explanation:
The Marginal product curve is hump-shaped and the marginal cost curve is U-shaped because these two move in opposite directions to each other.
If the marginal cost is decreasing therefore, the marginal product must be increasing. If the marginal cost is decreasing and the marginal product is increasing, average variable cost will have to fall because every additional unit produced incurs less cost so the average has to fall as well.
The effect of the declaration of a cash dividend on a company's financial statements is to decrease both stockholders' equity and total assets.
<h3>What are cash dividends?</h3>
Dividends are cash payments made to the stockholders of a public company. Stockholders are individuals who purchase shares in a public company.
Dividends are paid with cash, thus, the assets of a company would decline. Since assets is positively related to stockholders equity, stock holder's equity would also decline.
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Answer:
The effective annual rate of interest is "10.38%".
Explanation:
The given values are:
Nominal annual interest rate,
Q = 10%
i.e.,
= 0.10
Quarterly compounding,
q = 4
Now,
The effective annual rate of interest will be:
= ![[{1 + (\frac{Q}{q} )}^q] - 1](https://tex.z-dn.net/?f=%5B%7B1%20%2B%20%28%5Cfrac%7BQ%7D%7Bq%7D%20%29%7D%5Eq%5D%20-%201)
On substituting the given values in the above formula, we get
= ![[{1 + (\frac{0.10}{4} )}^4] 1](https://tex.z-dn.net/?f=%5B%7B1%20%2B%20%28%5Cfrac%7B0.10%7D%7B4%7D%20%29%7D%5E4%5D%20%201)
= ![[(1 + 0.025)^4] - 1](https://tex.z-dn.net/?f=%5B%281%20%2B%200.025%29%5E4%5D%20-%201)
= 
= 
= 
On converting it into percentage, we get
= 
%
Answer:
Existing Equity = 20 million
Existing debt = 60 million
Total capital = 20 million + 60 million = 80 million
a. Given company issued 30 million of equity to retire debt
Equity after raise = $20 million + $30 million = $50 million
Debt = $60 million - $30 million = $30 million
Total capital size remain at $80 million
Capital structure, Equity = $50 million/$80 million = 0.625 = 62.50%
Debt = (1-0.625) = 0.375 = 37.50%
b. The market would welcome the new issue as the risk of the firm would be reduced.
