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Veseljchak [2.6K]
2 years ago
7

Subprime lending means lending to borrowers and charging interest that is below the current prime interest rate.

Business
1 answer:
STALIN [3.7K]2 years ago
8 0

Answer:

<em>False</em>

Explanation:

<em>Subprime lending means lending to borrowers and charging interest that is </em><u><em>above</em></u><em> the current prime interest rate. </em>

The <em>current prime interest</em> refers to the rate offered to the best credit rated customers based on their credit history. This rate is lower as it is meant to be an attraction for the customers who are good credit payers and takers.

The <em>sub-prime lending</em> refers to giving loans at a rate higher than current prime interest rate to the borrowers who are lower on credit rating. This lending takes on higher risk and hence thereby charges higher interest from the borrowers.

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3 years ago
NewKirk Inc.., is an unlevered firm with expected annual earnings before taxes of $21 million in perpetuity. The current require
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Answer:

$11,895,000

Explanation:

Expected annual earnings before tax = $21,000,000

Debt issue = $30,000,000

Interest rate = 9%

Annual Interest expenses = $30,000,000 × 9%

= $2,700,000

EBT = EBIT - Interest expenses

= $21,000,000 - $2,700,000

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Net income = $18,300,000 × (1 - 35%)

= $11,895,000

Cash flows available to equity holders after recapitalization will be $11,895,000.

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3 years ago
[The following information applies to the questions displayed below.]
Vinil7 [7]

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Explanation:

7 0
3 years ago
Here are three things you could do if you do not attend your neighbor's barbecue: watch television with some friends (you value
Colt1911 [192]

Answer: Option (c) is correct.

Explanation:

Given that,

Alternatives for a person if he do not attend his neighbor's barbecue:

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(2) Read a good novel = he value this at $14

(3) Go in to work = he could earn $16 during the barbecue

Opportunity cost is the benefit that is foregone for an individual by choosing one alternative over other alternatives available to him.

If the opportunity cost is lower for an individual then this will benefit him whereas if the opportunity cost is higher then this will not benefit the individuals.

Therefore, the opportunity cost of going to his neighbor's barbecue is the enjoyment he get from watching television with some friends because this is the highest valued alternative forfeited.

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3 years ago
I made a kahoot game that I had to do for my class. Can someone join it and tell me if its good or not?
hammer [34]

Answer:

Yes I Will Join

Explanation:

7 0
3 years ago
Read 2 more answers
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