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alekssr [168]
3 years ago
12

The study by economists Cox and Alm found that the 2006 pre-tax income of the richest fifth of U.S. households is a. 5 times the

pre-tax income of the poorest fifth. b. 10 times the pre-tax income of the poorest fifth. c. 15 times the pre-tax income of the poorest fifth. d. 20 times the pre-tax income of the poorest fifth.
Business
1 answer:
umka2103 [35]3 years ago
6 0
I honest have know idea what I’m doing
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"Which statements are TRUE about IO tranches? I When interest rates rise, the price of the tranche falls II When interest rates
horrorfan [7]

The available options are:

A. I and III

B. I and IV

C. II and III

D. II and IV

Answer:

C. II and III

Explanation:

IO tranche which is an acronym for Interest Only tranche is defined as a form of tranche which earns interest only from a secured loan which is derived from Principal Only tranche.

However, Interest Only tranche is quite different from a typical bond, simply because when market interest rate increases the rate of prepayment decreases, which in turn makes the rate of maturity to be longer. Thereby when interest rates increase, prices increase, and vice versa.

Hence the true statements are:

II When interest rates rise, the price of the tranche rises

III When interest rates fall, the price of the tranche falls

5 0
3 years ago
Turnbull Co. is considering a project that requires an initial investment of $1,708,000. The firm will raise the $1,708,000 in c
exis [7]

Answer:

The weighted cost of capital for the project which is also the project discount rate is 10.12%

Explanation:

WACC=Ke*E/V+Kd*D/V*(1-t)+Kp*P/V

Ke is the cost of equity of 13.2%

Kd is the cost of debt of 8.7%

Kp is the cost of preferred stock of 9.9%

E is the market value of equity raised of $880,000

D is the market value of debt issued of $750,000

P is the amount of preferred stock sold to investors of $78,000

V is the sum of the market values above=$880,000+$750,000+$78,000=$1708000

WACC=(13.2%*880,000/1708,000)+(8.7%*750,000/1708,000*(1-0.25))+(9.9%*78,000/1708000)=10.12%

8 0
3 years ago
A company pays a constant 6.5 dividend on stock. The dividend will maintain for the next 12 years and cease forever. The require
zalisa [80]

Answer:

$46.31

Explanation:

Calculation to determine the current share price

Using this formula

Current share price=6.5*Present value of annuity factor(9.1%,12)

Present value of annuity=Annuity*[1-(1+interest rate)^-time period]/rate

Let plug in the formula

Current share price=6.5*[1-(1+0.091)^-12]/0.091

Current share price=6.5*[1-(1.091)^-12]/0.091

Current share price=6.5*7.124793

Current share price=$46.31

Therefore the current share price will be $46.31

6 0
3 years ago
The foreign market entry mode in which the manufacturer utilizes a local third party for the export transaction is known as:
m_a_m_a [10]

Answer:

The correct answer is letter "D": indirect exporting.

Explanation:

Indirect exporting is the business strategy by which companies handle their products to an intermediary so the intermediary is in charge of exporting the goods to end-consumers or retailers. While this practice allows firms to concentrate on domestic operations only it could represent a disadvantage since their companies' operations remain narrowed which could represent a lost chance to increase profits.

4 0
3 years ago
List three examples of coverage provided by employers for employees.
hichkok12 [17]
Medical, Disability, and Life Insurances
3 0
3 years ago
Read 2 more answers
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