Answer:
put upward pressure on; put downward pressure on
- The actions of U.S. investors to lock in this higher foreign return would PUT UPWARD PRESSURE ON the currency's spot rate and PUT DOWNWARD PRESSURE ON the currency's futures price.
Explanation:
If both the spot and the forward price of a currency are the same, it means that it should be worth the same today than in the future. If you can earn higher interest by investing in that foreign currency, then investors will start purchasing higher amounts of the foreign in order to invest and gain higher rates.
Since the demand for the foreign currency increases, that put upward pressure its current price. Simply more investors will want to invest in that currency. While that happens right now, the market will tend to adjust to correct this arbitrage, and the way this can be adjusted is by lowering the future price of the currency. That puts downward pressure on the forward rate.
Answer:
Hanna is correct.
Explanation:
The sale of the 2004 Dodge cannot be construed to be a sale of goods under the Uniform Commercial Code since this law covers sales of goods by merchants. Hanna cannot be said to be a merchant of 2004 Dodge as she is not known to be in the business for the purchase and sale of cars. Therefore, the case should be adjudicated under the common law. What has taken place in this instance is the exchange of a personal asset. Hanna cannot make a trading profit from the sale, but a capital gain. Rachel is not correct.
Business environment is simply the environment in which the business operates.
It includes the industry situation, the customers, the suppliers, the demand and supply of products of business, competitive position, government regulations, and everything that affects the business, directly or indirectly.
Answer:
7.85%
Explanation:
Face value of bond =$2000
Price of current bond= face value× 106.5% = $2130
Term= 25 years×2= 50 period
Coupon rate= 7%×1/2= 3.5%
Coupon amount= coupon rate×face value = $2000×3.5/100
=$70 for a period
YTM of bond= [coupon amount+ (maturity value-current price)/Term]/0.6×current price+0.4×maturity value]
YTM of bond= 6.487% per annum
Total market value of bond= 8,400bonds× $2130= $17,892,000
Market value of common stock= 275,000shares × 62.50= $18012500
Weight of common stock= 0.490009385
Weight of preferred stock= 0.023259294
WACC= Wd* Kd + Wc*Kc + Wp*Kp
= 0.486731321× 4.86525% +
0.490009385× 10.9624275+
0.023259294× 4.7368421%
=7.849%
= 7.85%(rounded)
Thus, WACC is 7.85%
