The answer is True.
Yeah that's the answer
Answer: The correct answer is "A disproportionate number of high-risk individuals are attracted to buy insurance.".
Explanation: A disproportionate number of high-risk individuals are attracted to buy insurance is a problem that arises in a health insurance market. Due to the greater risk, many insurers choose not to allow these individuals to hire these policies, and those that do offer these products do so with a higher premium than others.
Answer:
The correct answer is letter "D": None of the above.
Explanation:
<em>Even if John has no direct either indirect influence in the business it is not suitable for him to accept the gift from his friend</em>. The position John's friend has in the supplier company is unknown which implies his friend could play a managerial role, therefore, it is better to avoid any type of action that could be a signal of preference towards that company.
Besides, John works in accounting which is an administrative department of the business, thus, John should be extra careful in his actions regardless of the influence he might have in the firm.
4000*.05=200 so 200 is ur interest 4000+200=$4200
Answer: SEE EXPLANATION
Explanation:
Given the following ;
Values depending on Success
$150M, $135M, $95M, $80M
Risk free rate = 5% = 0.05
Pervebtage to be lost in case of bankruptcy = 25% = 0.25
A.) 0.25 × [( 150 + 135 + 95 + 80) ÷ 1.05] = $109.52 million
Assume a zero-coupon debt with a $100million face value
B.) 0.25 × [( 100 + 100 + (95×0.75) + (80×0.75)) ÷ 1.05] = $78.87 million
C.) Yield to maturity (YTM)
(100M÷78.87M) - 1
1.2679 - 1 = 0.2679 = 26.79%
Expected return = 5%
D.) Equity value
0.25 × [( 150 + 135 + (95×0.75) + (80×0.75)) ÷ 1.05] = $99.11 million
E.) share if no debt is issued
109.52 ÷ 10 = 10.95 per share
F.) Share price if debt of $100M is issued
99.11 ÷ 10 = 9.91 per share
The price differs because bankruptcy cost will Lower the share price.