Answer:
It will reduce the amount of dividiends it can pay.
Explanation:
As there is an amount of the retained earnings that is restricted the company cannot use them to pay up neither stock or cash dividends in the future.
The retained earnings are used to pay dividends but also, are part of the equity of the firm thus the RE count to the capital structure of the company . Loans can be obtained with better rates if thecapital structure is more based on equiy than in liabilities thus, the board of directors is planning ahead the future plant exansion avoiding to use cash and deteriorate his capital structure to pay up dividends.
Answer:
For economists is important to avoid political interferance in the monetary policy. Populist governments often use the creation of money to justify their political programs, causing inflation and distortions on the market.
In the last report of FOMC is highlighted the behaviour of market labour and the lower expectations of inflation.
Explanation:
There are two tools commonly used in political economy to finance government programs: taxation and paper currency print. When the central bank is not independent, the government has an incentive to print money to fund their programs, causing inflation. In economic science has been demonstrated that inflation is always caused by monetary phenomena.
Answer:
Interest Receivable 6,490 debit
Interest Revenue 6,490 credit
(To record interest revenue from Stellar Enterprises loan)
Explanation:
The banks accounting will reflect the accrued interest as well. From their perpective, the interest are revenue as they are the lender of the loan.
It will recognize the interest revenue from the accounting period
and will declare the interest receivable for the same amount.
<u>From this we can deduct:</u>
the payable from one entity is a receivable for another entry.
the interest expense from one firm will be interest revenue for another.
Answer:
B. Take defensive strike action.
Explanation:
One of the functions of a trade union or labor union is to protect the interest of its members in a workplace. So, if a profit firm treats its workers poorly by underfunding contribution to workers pension as required under a collective agreement while paying out record bonuses to executives then attempts attempt to reduce workers pension entitlements, the union members will most likely embark on an industrial strike.
The aim of the strike is to halt daily operations of the firm until their demands are heard and an agreement is reached. The members of the union were treated unfairly by the firm by not honoring their pension funding agreement and to make matters worse the decided to try and reduce the workers pension.
If the members don't embark on the industrial strike, the firm would reduce their pension benefits. The most likely action of the union members would be to embark on a defensive strike action to protect themselves.
Answer:
The expected return and beta on the portfolio be after the purchase of the Alpha stock will be 11.20%; 1.23
Explanation:
Provided data;
90000 value portfolio with expected returns of 11% and beta of 1.20
($10 × 1000) = 10000 value Alpha Corp added with expected returns of 13% and beta of 1.50.
The new expected portfolio return =
rp = 0.1 × 13% + 0.9 × 11%
rp = 0.1 × 0.13 + 0.9 × 0.11
= 11.20%
The new expected portfolio beta =
bp = 0.1 × 1.50 + 0.9 × 1.20
bp = 1.23