All categories

3 years ago

Describe the difference between debt capital and equity capital.

Business

1 answer:

shusha [124]3 years ago

6 0

Answer:

Explanation:

Companies borrow debt capital in the form of short- and long-term loans and repay them with interest. Equity capital, which does not require repayment, is raised by issuing common and preferred stock, and through retained earnings. Most business owners prefer debt capital because it doesn't dilute ownership

You might be interested in

A $2,000 cash dividend is planned in 2019. No dividend was paid in 2018. 1,000 shares of 5% cumulative $10 par value preferred s

Irina-Kira [14]

Answer:

C) $1000

Explanation:

First lets calculate the cumulative preferred stock dividend for 2 years

(1000 * 10 ) * 5% = 500 / year

so for 2 years = $1000 since it is cumulative and not paid in one year is added to next year.

Total dividend payable = $2000

so for common stock whatever is left over is paid thus,

Common stock share = Total - Preferred cumulative = 2000 - 1000 = $1000

Hope that helps.

4 0

4 years ago

Marco is a Latino who lives in Boston, Massachusetts. Over the years, he has noticed that more stores in his community specializ

boyakko [2]

Answer:

<u>the trend of more Latino immigration </u>

Explanation:

The stores have identified a market opportunity because of the increase in Latino immigrants in Boston, Massachusetts.

Note that when a significant amount of a population come from a certain ethnic group, demand for ethnic products is more likely to increase. Thus, this has made Marco feel very much at home.

3 0

3 years ago

Suppose that actual inflation is 3 percent, the Fed's inflation target is 2 percentage points, and unemployment rate is 3 percen

Dahasolnce [82]

The government would set its targeted interest at 6.5%

Based on the Taylor's rule

R = π + A + 0.5(A-A*) + 0.5

This is the formula that helps to get the output gap

<u>Definition of terms</u>

R is the nominal federal funds rate

π is the real rate of federal funds = 2%

A is the rate of inflation

A* is the target of of inflation = 2%

Rate of unemployment = 3%

The government has a target of full employment that is at 4 percent.

When we enter the values into the formula

R = 2% + 3% + 0.5(3%-2%) + 0.5%(2%)

= 5% + 0.5% + 1%

= 6.5%

Therefore the government would set its targeted interest at 6.5%

5 0

3 years ago

What market structure has many relatively small buyers and sellers, a standardized product, good information to both buyers and

Ganezh [65]

Answer:

Perfect Competition

Explanation:

Perfect competition is a market characterized by many buyers and sellers that have full information and faces no barrier in entry and exit of the markets. It is the ideal form of market structure where competition is at is greatest possible value. The numerous buyers and sellers are engaged in trade of a homogeneous good in the market. It is also characterized by no long run economic profit and no control over prices.

5 0

3 years ago

Read 2 more answers

HELP ASAPPPP HELPPP PLEASE HELP ME NO LINKS

Alenkinab [10]

Umhow are we supposed to help u with this?

7 0

3 years ago