A large corporation has accrued a lot of debt over the last two years in an

A municipal issuer official has lost her re-election campaign and has just left elected office. She is soliciting political cont

Sindrei [870]

Answer: Because the issuer official no longer holds elected office, the contribution limits of Rule G-37 do not apply.

Explanation:

Rule G-37 is a way to ensure that Municipal Issuers are not unduly influenced by those who donated to their campaigns to get into a position to become Municipal Issuers.

It prohibites for 2 years, Municipal Finance Professionals (MFP) amongst others from engaging in municipal securities business with a Municipal issuer.

An exception however, is that if the MFP is entitled to a vote for the Official in question, they can donate no more than $250 per election.

Seeing as the Municipal Issuer Officer has lost her position, the MFP need not worry about this $250 limit as it no longer applies to her. The MFP is free to donate $500 to the "clean-up" campaign.

5 0

3 years ago

Tom Noel holds the following portfolio: Stock Investment Beta A $150,000 1.40 B 50,000 0.80 C 100,000 1.00 D 75,000 1.20 Total $

exis [7]

Answer: -0.24

Explanation:

The portfolio beta is a weighted average of the betas of the individual stocks in it.

The portfolio beta before the replacement is;

= (1.4 * 150,000/375,000) + (0.8 * 50,000/375,000) + ( 1 * 100,000/375,000) + (75,000 * 75,000/375,000)

= 0.56 + 0.11 + 0.27 + 0.24

= 1.17

After the replacement, portfolio beta will be;

= (0.75 * 150,000/375,000) + (0.8 * 50,000/375,000) + ( 1 * 100,000/375,000) + (75,000 * 75,000/375,000)

= 0.32 + 0.11 + 0.27 + 0.24

= 0.93

The change is therefore;

= 0.93 - 1.17

= -0.24

6 0

3 years ago

Interest versus dividend expense Michaels Corporation expects earnings before in- terest and taxes to be $50,000 for the current

Ganezh [65]

Answer:

a. In case of interest paid = $24,700.

b. In Case Preferred Dividend is Paid = $20,500

Explanation:

Earnings before Interest And Taxes (EBIT) = $50,000

a. In case of interest paid

EBIT = $50,000

Less: Interest = $12,000

Earnings Before Taxes = $50,000 - $12,000 = $38,000

Less: Tax @35% = $38,000 X 0.35 = $13,300

Earnings After Tax =$38,000 - $13,300 = $24,700.

This is the value available for common stock.

b. In Case Preferred Dividend is Paid

EBIT = $50,000

Less: Taxes @ 35 % = $50,000 X 0.35 = $17,500

Earnings After Tax = $50,000 - $17,500 = $32,500

Less: Preference Dividend = $12,000

Earnings available for equity or common stock = $32,500 - $12,000 = $20,500

The difference is of tax benefit on payment of interest as that is taxable and preference dividend is not taxable.

a. In case of interest paid = $24,700.

b. In Case Preferred Dividend is Paid = $20,500

7 0

3 years ago

Suppose that fertilizerfertilizer is necessary to produce wheatwheat. if the price of fertilizerfertilizer fallsfalls, the supp

asambeis [7]

Answer: Shift to the right

Explanation:

Fertilizers are an important input in wheat production. When the price of fertilizers fall, it leads to a decrease in cost of producing wheat. Thus, producers will supply more wheat in the market. As a result the supply curve for wheat will shift to the right leading to a fall in the price of wheat and an increase in the quantity of wheat sold in the market.

4 0

3 years ago

A dwelling with a replacement cost of $150,000 was insured under a Homeowners 3 policy for $105,000 at the time the roof was des

Mazyrski [523]

Answer: $13125

Explanation:

The amount that the insurer will pay to settle this loss will be calculated thus:

= Insured claim × Insurance value / 80% of replacement value

= 15000 × 105,000 /80% × 150000.

= 15000 × 105,000 / 120000

= 13125

Therefore, the insurer will pay $13125

3 0

3 years ago