Answer:
These are the options for the question:
A. They should be more willing to tear down the $5 million stadium, because it cost less to build.
B. They should be more willing to tear down the $50 million stadium, because it cost more to build.
C. The cost to build the old stadium shouldn’t be considered.
And this is the correct answer:
A. They should be more willing to tear down the $5 million stadium, because it cost less to build.
Explanation:
City A will likely be more willing to tear down its old stadium because it costed $5 million to build. City B, on the other hand, will have to think twice because a stadium that costed $50 billion to build could have more value than it seems, or the City could simply not have enough money to build a better new stadium (something that would probably cost more than $50 billion to do).
Answer:
The correct answer is option C.
Explanation:
Dividend distribution in the first year = 120,000 shares of outstanding common stock
Each right was exercisable.
Though none of the rights have been exercised.
The shares have been redeemed by paying each stockholder=$0.10/right
Reduction in the West's stockholder's equity
=Number of shares*amount paid for redemption
=120,000*$.10
=$12,000
So, option C is the right answer.
Answer:
D) all of the above
Explanation:
First find the present value for each alternative using PV of perpetual cashflow formula;
PV = CF / rate
CF = 50
If rate= 5%;
PV = 50/0.05 = $1,000
If rate = 2%;
PV = 50/0.02 = $2,500
With these two calculations, we see that;
-the bond price increased by $1,500
-you could sell this bond at a capital gain, meaning you can sell it a higher price that what you bought it for.
-at an interest rate of 2%, the speculative demand for money would increase
Hence , all these choices are correct!
Find out what people buy and then proceed to survey how the prices of those items change
