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3 years ago

Which of the following statements is CORRECT?

Business

1 answer:

Advocard [28]3 years ago

8 0

Answer: Option B

Explanation: In simple words, capital market is that market in which securities that are long term in nature are sold and purchased. The maturity period of such securities is generally more than one year.

These, markets transact all types of securities whether it is equity or debt, but it has to be long term in nature.

Hence, from the above we can conclude that the right answer is Option B.

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Paul Inc. forecasts a capital budget of $725,000. The CFO wants to maintain a target capital structure of 45% debt and 55% equit

defon

Answer:

If the company follows the residual dividend policy, the income he must earn is $898,750

The dividend payout ratio will be 55.63%

Explanation:

In order to calculate the income must it earn we would have to make the following calculation:

income must it earn=55% equity+dividends

55% equity=$725,000*0.55

55% equity=$398,750

Therefore, income must it earn=$398,750+$500,000

income must it earn=$898,750

If the company follows the residual dividend policy, the income he must earn is $898,750.

To calculate the dividend payout ratio we would have to calculate the following formula:

dividend payout ratio=dividends paid/income must it earn

dividend payout ratio=$500,000/ $898,750

dividend payout ratio=55.63%

The dividend payout ratio will be 55.63%

4 0

4 years ago

What is the role of the GP during a womans pregancy?

sladkih [1.3K]

Your GP can talk to you about your options for pregnancy care and the birth. Your choices, and the facilities available where you live, will determine the role your doctor will play. Your GP will check your medical history. They'll ask about health issues that could affect you or your baby

8 0

3 years ago

Supler Corporation produces a part used in the manufacture of one of its products. The unit product cost is $22, computed as fol

geniusboy [140]

Answer:

$ 2 per unit on average

Explanation:

Calculation for what the financial advantage (disadvantage) of purchasing the parts from the outside supplier would be:

First step is to calculate the Relevant cost of making

Relevant cost of making = 9 + 7 + 1 + ( 5 * 80 % ) Relevant cost of making= $ 21

Now let calculate the Financial advantage of buying

Financial advantage of buying = ( 21 - 19 )

Financial advantage of buying= $ 2 per unit on average

Therefore the financial advantage (disadvantage) of purchasing the parts from the outside supplier would be:$ 2 per unit on average

8 0

3 years ago

The values of outstanding bonds change whenever the going rate of interest changes. In general, short-term interest rates are mo

Setler [38]

Answer: False

Explanation:

The volatile short-term interest rates do not affect long-term bonds simply because they are long term.

When it comes to general interest however, Long term bond prices are more volatile to interest rate changes than short term bonds. This is because of how bond prices are calculated.

Bonds are calculated by discounting cashflows over the life of the bond. For a longer term bond therefore, there will be more cashflows over longer periods that need discounting. If rates were to change therefore, the present value of the cashflows especially for the ones further away, will be affected more therefore the long term bond price will be affected more as well.

For example;

Take a 6% $1,000 bond, maturing in a year and a 6% $1,000 bond maturing in 20 years. Assume Yield to be 6% as well.

As the coupon rates equal the yield, both prices will be $1,000

Now assuming the Yield changes to 5%.

Using financial calculators, the 1-year bond will now be priced at $1,009.52

The 20 year bond however will now be priced at $1,124.62.

Conclusion: <em>Long-term bond prices are more sensitive to interest rate changes than short-term bonds. </em>

4 0

3 years ago

The culmination of preparing operating budgets is the

Masja [62]

Is the budgeted balance sheet

4 0

3 years ago

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