Answer:
will attract more resources towards the production of the product
Explanation:
A price floor is when the government or an agency of the government sets the minimum price of a product. A price floor is binding if it is set above equilibrium price.
Because price is set above equilibrium price, quantity supplied would exceed quantity demanded and there would be a surplus.
If price were set below equilibrium price (the price floor is non-binding) there would be shortages as quantity demanded would exceed quantity supplied
price floor benefits sellers
Due to increased profitability as a result of the high price as a result of price floor, there would be a resource flow into that industry
Cost of equity capital is closest to: 16 percent
Solution:
WACC is covered on page 120 Corporate Finance, under Capital Structure.
Using the standard equation for WACC = %wt Equity x cost of equity (re) + %wt Debt x cost of debt (rd).
Since there is a 20% tax rate for the firm, the cost of borrowing is reduced by that amount. So the cost of debt is 4%, not 5%.
Plug the formula: 10% = 50% x re + 50% x 4%
The formula ( i.e. 0.1+(0.1-0.05)(1)(1-0.2)) in CFAI reading is questionable.
The calculation is 0.1+(0.1-0.05*(1-0.2))*(1)=16%
Answer: it’s the amount of output compared to the input needed to create something
Explanation:
just took the test
Answer:
the base price used is the face value of the security and not the purchase price of the security and ii) a 360-day year is used. The bond equivalent yield uses a 365-day year and the purchase price, rather than the face value of the security, is used as the base price. Treasury bills are quoted on a discount yield basis.
Explanation:
<em>Price indexes define the cost of goods in the entire economy at a given point in time.</em>
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A price index is a scale used to measure changes in the levels of prices. This is a percentage scale that can be either based on prices of a single good or an entire market basket. This is only a small-scale index, not representative of an entire economy.
