Answer:
the correct answer is option a) decline
Explanation:
Prices of gold at the time of inflation goes up because over a long inflationary period people think of gold as a tool for hedging against such conditions, and that is why people hold money in form of gold , which leads to the prices of gold rising.
Similarly in the situation of international tensions , prices of gold goes up because people think them as a safe heaven for putting their investments. While these international tensions have negative impact on all other asset classes except gold.
So from the above explanation we can say that when the international tensions are less or there is a situation of disinflation in the economy the prices of gold will fall or decline.
Answer:
- Self-Interests exist in both customers and the companies who sells the product.
Self-interest held by the companies will determine how much profit that they desire to acquire. Some owner wanted a high profit margin, some wanted lower , etc. Self-interest held by customers will determine the type of value that the consumers expect from the product and how much money they're willing to pay to obtain it.
Both of this will create a push and pull in the market. Eventually, the price will fall to the spot where both sellers and consumers believe as 'fair.'
- Competition is an additional factor to regulate prices that tends to be beneficial for the customers.
The existence of competition make consumers have more than one option in order to obtain a similar product. This <u>make companies have to reduce their self-interest and offer prices that can compete with the competitors.</u>
This tend to bring the prices lower from the initial equilibrium.
Answer:
<em>Therefore the gain or loss to the current shareholders of Goodday if the merger provides no synergy is -$10
</em>
Explanation:
Given:
<em>The Total debt remains same after merger at Pre-merger value = $80 + $40 = $120
</em>
<em>The Value of entities together in Economic state 1 = $160 + $20 = $180
</em>
<em>
Net equity in economic state 1 = Value of entities – total debt
</em>
<em>
= $180 - $120 = $60
</em>
<em>Then,</em>
<em>
The Value of entities in Economic state 2 = $40 + $80 = $120
</em>
<em>
Net equity in economic state 2 =
</em>
<em>= $120 - $120 = $0
</em>
<em>
The Both states are equally possible.
</em>
<em>
Expected value of combined entity = ($60 + $0)/2 = $30
</em>
<em>
Market value of Goodday equity before merger = $40
</em>
<em>
Synergy effect = Expected value of combined entity - Market value of Goodday equity before merger= $30 - $40 = -$10
</em>
Answer:
Sarbanes Oxley act of 2002 is law of United States passed on 30th July 2002. This act helps to protect investor from fraudulent financial reporting by organizations. The act requires all companies to include report on their internal controls in the Financial reports.
Explanation:
The section 302 of the act directs the Securities and Exchange Commission to adopt rules to adopt financial officer who certify company's annual, interim and quarterly financial reports. The main purpose is to minimize any chance of intentional frauds or deceive investors. The officers review financial reports of the company and certify that these reports does not cover any significant wrong statement, Financial statements of the company are fairly presented based on the knowledge of the officer. He is also responsible to review the report of internal controls of the company to ensure that there is no weakness in controls which can lead to frauds in the organization.