Bills, Tickets, Car Wrecks, Apps
Answer:
Both statements are False
Explanation:
<u>Statement a</u>
As with higher debt involved the expected return on investment is more on equity. But reducing debt up till a certain level is beneficial in that condition, but there is an ideal debt to equity ratio of 1 - 1.5, it varies upon the industry requirements and conditions.
Although the theory which states that reducing debt will reduce cost of equity and of debt is false as there is a tax benefit on debt which states that cost is always less of debt.
<u>Statement b</u>
Financial distress and bankruptcy has several reasons to occur, and one of them is borrowing.
It do not depend on the level of borrowings, whether moderate or high, borrowings demand compulsory payment in the terms of interest due, which leads to a burden on the company. This also increases the demand of shareholders.
Thus, the statement is false.
Answer:
preferred dividends = $30380
Common stock = $ 335620
Explanation:
Dividends 366000
preferred 7% * 217000= $15190 *2 years = $30 380
common stock = $335620
The total dividend declared is 366000 and preferred is 15190 per year but it is cumulative so we add the year that was in arrears so to get total dividend for preferred stock then we deduct the preferred from total dividend declared to get common stock's dividend.
Answer:
False
Explanation:
A put option buyer purchases a right to sell a currency on expiry date at a pre determined exercise price or strike price. Put buyer is not under any obligation to sell the option. He will only exercise the right when it is beneficial for him.
3 terms are relevant here,
OP= Option premium paid
CMP= Current Market Price
EP= Exercise or strike price
A put buyer gains when his exercise price is more than the CMP on the expiry date.
His gain is = EP - CMP - OP
So, when exercise price as reduced by option premium paid is equal to current market price, break even point for a put buyer is reached.
Hence the given statement is false.
Answer:
Percentage of Personal consumption expenditures is 70.07%
Explanation:
The most common way to measure the national income account is gross domestic product (GDP)
GDP = C + I + G + (X – M) or
GDP = private consumption + gross investment + government investment + government spending + (exports – imports).
government purchases ($1,050) is government spending
personal consumption expenditures ($4,800) is private consumption
imports ($370)
exports ($240)
gross private domestic investment ($1,130) is gross investment
GDP = $1,050 +$4,800+$1,130+$240-$370=6.850
Personal consumption expenditures proportion is $4,800/6.850=0,7007
in %= 70.07%
