Answer:
A. 1 and 4 are true
Explanation:
Statement 1: When inflation goes up the market prices of goods increase and reduces buying power of customer. So, if you get $100 even after 5% inflation, you would get $95 worth good.
Statement 2: It is commonly known as, the higher the risk the higher the gain. So, risk premium and risk exhibited by security is directly related with each other.
Statement 3: Since, risk free rate is the compensation for time value of money, that is why it can’t make real risk-free rate negative because real risk rate is there, but inflation can go higher than risk free rate.
Statement 4: Maturity payment is paid to investors or savers after certain period of time along with principal amount.
Hence, A. 1 and 4 are true
Answer:
An example for you is storage buildings.
Explanation:
Storage buildings are very included in capital.
Answer:
WACC= 17.95%
Explanation:
Weighted average cost of capital is the average cost of all of the long-term types of finance used by a company weighted according to the that amount of finance used in relation to the total pool of fund.
It is calculated using the formula below:
WACC = (We×Ke) + (Wd×Kd)
Ke-cost of equity- 22%
We- equity weight- 100% - 45% = 55%
Kd-After tax cost of debt-10.3%
Wd- 45%
After tax cost of debt = Before tax ×× (1- tax rate)
After tax cost of debt = 13%× (1-0.21) = 10.3%
Cost of equity = 22%
WACC =(0.55× 22%) + (0.45× 13%)=17.95%
WACC= 17.95%
Answer:
False
Explanation:
Liquidity gap is the shortage of funds that a firm experiences due to the difference in the supply and demand of the assets and liabilities and also due to differences in the maturity of the assets and liabilities . When there will be an excess demand for funds, this will create a shortage and hence there will exist a liquidity gap.
Answer:
what you will be when grow up?