Answer:
In equity crowdfunding, people invest money in a company in exchange for the company’s shares
Explanation:
Equity crowdfunding is the process in which people invest in start up companies and early stage companies that have not been listed on a stock market in exchange for shares in that company. As a result of the investment, the person becomes a shareholder and makes profit when the company do well but if the company fails, shareholders make losses.
Startups and early-stage companies use this method to raise capital.
Answer:
A circular definition is one that uses the term(s) being defined as a part of the definition or assumes a prior understanding of the term being defined. There are several kinds of circular definition, and several ways of characterising the term: pragmatic, lexicographic and linguistic.
Answer:
The total cash flow of the firm
Explanation:
The M & M theory is a theory developed by Modgliani Miller about the capital structure of a company and its overall value .
The theory was first enacted under the assumption of a perfectly efficient market and when the effects of taxes and bankruptcy costs were not considered, However , he later developed another theory where tax and other costs are now considered to address the real world condition.
In summary , the basic lesson is that the value of a firm is dependent on the total cash floe of the firm.
Answer:
a. Italy has a comparative advantage in producing potatoes
Explanation:
Let us compute opportunity costs (OC).
In France,
OC of potato = 3000/9000
= 0.33 lemon
OC of lemon = 9000/3000
= 3 potato
In Italy,
OC of potato = 3000/3000
= 1 lemon
OC of lemon = 3000/3000
= 1 potato
France can produce potato at a lower OC than Italy, so France has comparative advantage in potato. Italy has a comparative advantage in producing lemons.
Trade is mutually beneficial if terms of trade (relative price) lies between the OC.
0.33 < Relative price of potato < 1 lemon, Or
1 potato < Relative price of lemon < 3 potato
Therefore, Italy has a comparative advantage in producing potatoes.
