Answer:
3.333% which is approximately 3%.
Explanation:
Real Exchange rate is the price of foreign goods compared to the price of domestic goods. This can be calculated using the following formula:
R = NER × (DPL ÷ FPL) ............................................... (1)
Where:
R = Real Exchange Rate
NER = Norminal Exchange Rate
DPL = Domestic Price Level
FPL = Foreign Price Level
When there is a change in the real exchange rate, equation (1) will expressed is follows:
ΔR = ΔNER × (ΔDPL ÷ ΔFPL) ............................................... (2)
Where:
ΔR = Change in Real Exchange Rate
ΔNER = Change in Norminal Exchange Rate = 5%
ΔDPL = Change in Domestic Price Level = Domestic Inflation = 2%
ΔFPL = Change in Foreign Price Level = Foreign Inflation = 3%
If we substitute all these values into equation (2), we can solve for ΔR as follows:
ΔR = 5% × (2% ÷ 3%)
= 5% × 0.6667
ΔR = 3.333%
Therefore, change in the real exchange rate is 3.333% which is approximately 3%.
Answer:
a. 8.79%
Explanation:
WACC = Weight of debt * Pretax cost * (1 - Tax) + Weight of Equity * Cost of Equity
Value of Equity = 10,700 * $63 = $674,100
Value of debt = 320 * $1000 * 93.6% = $299,520
Weight of Debt = $299,520/($299,520 + $674,000) = 30.76%
Weight of Equity = $674,000/($299,520 + $674,000) = 69.24%
WACC = 30.76% * 5.89% * (1 - 40%) + 69.24% * 11.13%
WACC = 30.76% * 5.89% * 0.60 + 69.24% * 11.13%
WACC = 0.010870584 + 0.07706412
WACC = 0.087934704
WACC = 8.79%
Answer:
a. Financing for public corporations must flow through financial markets.
FALSE, it can flow through financial markets or financial intermediaries.
b. Financing for private corporations must flow through financial intermediaries.
FALSE, it can flow through financial markets or financial intermediaries.
c. Almost all foreign exchange trading occurs on the floors of the FOREX exchanges in New York and London.
FALSE, they are traded in many different markets around the world.
d. Derivative markets are a major source of finance for many corporations.
FALSE, the major source of financing for corporations are stock markets.
e. The opportunity cost of capital is the capital outlay required to undertake a real investment opportunity.
FALSE, opportunity cost of capital refers to lost earnings resulting from choosing one investment over another alternative.
f. The cost of capital is the interest rate paid on borrowing from a bank or other financial institution.
FALSE, opportunity cost of capital refers to lost earnings resulting from choosing one investment over another alternative.
Answer:
d. The presence or absence in a nation of supplier industries and related industries that are internationally competitive
Explanation:
Related and supporting industries can be described as upstream and downstream industries which bring about innovation via exchanging ideas.
In an economy, upstream industries are reliable supplier of inputs to a company, while downstream industries assist a company in marketing and distributing its products.
The absence or presence of the related and supporting industries usually have effect on the success of a company in a country.
Answer: A technology entrepreneur is an investment in a project that assembles and deploys.
Explanation: Hope this helps!
