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iren [92.7K]
3 years ago
6

Which of the following is true about bonds?

Business
1 answer:
nata0808 [166]3 years ago
8 0

Answer:

B. The primary advantage to municipal bonds is that interest income received is not taxed by the federal government.

Explanation:

A bond can be defined as a debt or fixed investment security, in which a bondholder (investor or creditor) loans an amount of money to the bond issuer (government or corporations) for a specific period of time. The bond issuer are expected to return the principal (face value) at maturity with an agreed upon interest (coupon), which are paid at fixed intervals.

A municipal bond can be defined as a type of bond that is typically issued by a municipality, county, local government or state in order to finance or sponsor capital expenditures for the public such as water supply, construction of roads, etc.

Hence, the primary advantage to municipal bonds is that interest income received on this type of bond is not taxed by the federal government.

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Myron Gordon and John Lintner believe that the required return on equity increases as the dividend payout ratio is lowered. Thei
alukav5142 [94]

Answer:

The answer is d.investors view dividends as being less risky than potential future capital gains.

Explanation:

This is called the "Bird in Hand theory" as well. What it says technically is that investors prefer dividends from stock investing to potential capital gains because of the inherent uncertainty associated with capital gains.  

In other words, a Bird in hand worth 2 in the bush!

This is because of the inherent risk in the capital gains in the market. You can NEVER predict the future of a market. Dividend however, can be predicted along with the annual performance of a company.

7 0
4 years ago
There are three key approaches to entering international markets. each company must decide how to enter each chosen marketlong d
Minchanka [31]

The three key approaches that are needed in entering international markets include the following; direct investment, exporting and even joint venturing. These are three key approaches that will complete the space provided above as this is where the company decide on how a chosen market long dash may enter.

3 0
3 years ago
Strategic business units that compete in a low-growth market but hold considerable market share are called ________. Their earni
kherson [118]

Strategic business units that compete in a low-growth market but hold considerable market share are called <u>Cash Cows</u> because their earnings and cash flows are high and stable.

<h3>What is the Cash Cow?</h3>

The cash cow is a quadrant in the BCG matrix that shows that a unit has a consistently profitable business and possesses the following characteristics:

  • Competes in a low-growth market.
  • Holds considerable market share.
  • High and stable cash flows and earnings.

Thus, the strategic business unit with the above characteristics is a <u>cash cow</u>.

Learn more about the BCG matrix at brainly.com/question/26633615

3 0
2 years ago
Suppose that the residents of Greenland play golf incessantly. In fact, golf is the only thing they spend their money on. They b
andre [41]

Answer:

CPI in 2020 =142.7

CPI in 2019 = 100

Explanation:

Inflation is the increase in the general price level. Inflation erodes the value of money.

<em>Consumer Price Index(CPI ): This is the weighted average price of a basket of goods and services consumed by a typical consumer. It is used to measure the rate of inflation.</em>

The increase in the CPI is taken to be the rate of inflation. For example, the CPI rose to 1.09 from 1.00, this implies an inflation rate of 9% within the time period in focus.

The CPI =

The price of a basket of goods in a current  year ÷ Divided by the price of a basket of goods in  a base year

The consumer price

CPI in 2019 = (1000× $2)  + (100× $50) + ( 500× $$0.10)= 7050

CPI in 2020= (1000× $2.50)  + (100× $75) + ( 500× $$0.12)=10,060

CPI in 2020 = 10,060/7050× 100 =142.7

CPI in 2019 = 100

CPI in 2020 =142.7

CPI in 2019 = 100

Note , we assume the CPI for 2019 is 100, since we were not provided with data to compute the price of a basket of good in 2018

4 0
3 years ago
Which of the following would have a low likelihood of being organized as a profit center? A maintenance department that charges
Nina [5.8K]

Answer:

B

Explanation:

Both the billing department of an Internet Services Provider (ISP) and the mayor's office in a large city.

6 0
4 years ago
Read 2 more answers
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