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3 years ago

Evaluate this sentence, "The best way to get rid of poverty is to increase government expenditures on welfare programs."

Business

1 answer:

solmaris [256]3 years ago

8 0

Answer:

c. This sentence is false. Increasing transfer benefits like welfare will lower the opportunity cost of making decisions that can lead to poverty

Explanation:

Welfare programs involves transfer payments. These payments are made by the government in order to assist the marginalized sectors or people who are in need so they can thrive economically. In this case, the government just provides and doesn't receive anything in return.

If the government expenditures would increase, the transfer benefits would increase too. So this would most likely lead to "poverty" because the government will just be spending money without any returns.

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AZ Products has 375,000 shares of common stock outstanding at a market price of $35 a share. Next year's annual dividend is expe

My name is Ann [436]

Answer:

The firm's weighted average cost of capital 5.81%

Explanation:

In order toTo calculate WACC, we need to calculate the cost of equity and after-tax cost of debt. The WACC can be calculated with the use of following formula:

WACC = After-Tax Cost of Debt*Weight of Debt + Cost of Equity*Weight of Equity

Where,

After-Tax Cost of Debt = Pretax Yield*(1-Tax Rate)

Market Value of Debt = Outstanding Bonds*Par Value*Current Selling Percentage

Cost of Equity = D1/Current Market Price + Growth Rate

Market Value of Equity = Number of Common Shares Outstanding*Current Market Price

Weight of Debt = Market Value of Debt/(Market Value of Debt + Market Value of Equity)

Weight of Equity = Market Value of Equity/(Market Value of Debt + Market Value of Equity)

Therefore, Market Value of Debt = 7,500*1,000*98.60% = $7,395,000

Market Value of Equity = 375,000*35 = $13,125,000

Weight of Debt = 7,395,000/(13,125,000 + 7,395,000)

Weight of Equity =$13,125,000 /($13,125,000 + 7,395,000)

Cost of Equity = 1.50/35 + 2% = 6.28% 0.01801

After-Tax Cost of Debt = 7.65*(1-34%) = 5.05%

Using the values calculated above in the formula for WACC, we get,

WACC = 5.05%*7,395,000/(13,125,000 + 7,395,000) + 6.28% *$13,125,000/($13,125,000 + 7,395,000) = 5.81%

5 0

4 years ago

A group of buyers and sellers of a good or service and the institution or arrangement by which they come together to trade is a

sergejj [24]

Answer:

Market

Explanation:

A market is an arrangement that allows buyers and sellers to exchange goods or services . In market arrangement ,a group of buyers and sellers of a good or service ant the institution or arrangement by which they come together to trade

4 0

3 years ago

Suppose there is a product that is being sold in a perfectly competitive market. If the market price of the product falls, prod

yuradex [85]

Answer:

Decrease; Less

Explanation:

The producer surplus is the difference between the minimum price that a producer is willing to accept for a product and the price he actually receives.

When the market price of a product falls, the producer surplus will decrease as well.

The lower market price implies that there will be less area between the supply curve and the market price of the product.

3 0

3 years ago

Phillips Equipment has 6,500 bonds outstanding that are selling at 96.5 percent of par. Bonds with similar characteristics are y

Keith_Richards [23]

Answer:

Ke = Rf + β(Rm – Rf)

ke = 2.2 + 1.32 (10.6 - 2.2)

Ke = 2.2 + 1.32(8.4)

ke = 2.2 + 11.088

ke = 13.288%

kp = D/Po

kp = $5.50/$64

Kp = 0.0859375 = 8.59375%

Kd = 6.7%

Kd after tax = 6.7(1-0.21) = 5.293

WACC = Ke(E/V) + kp(P/V) Kd(D/V)(1-T)

WACC = 13.288(3,075,000/12,419,500) + 8.59375(3,072,000/12,419500) + 5.293(6,272,500/12,419,500)

WACC = 3.29 + 2.126 + 2.6732

WACC = 8.09%

The correct answer is B

Market value of the company: $

Market value of equity = 75,000 x $41 = 3,075,000

Market value of preferred stock = 48,000 x $64 = 3.072,000

Market value of debt = 6500 x $96.5 = 6,272, 500

Market value of the company 12,419,500

The correct answer is B

Explanation:

In this question, we need to calculate cost of equity based on capital asset pricing model. Then, we will calculate cost of preferred stock as shown above. Thereafter, the after-tax cost of debt will be computed as illustrated above. We also need to calculate the market value of the company. Finally, we will calculate weighted average cost of capital as computed above.

4 0

4 years ago

Employees of Gawker Media often find themselves successful when they have a passion for the particular area of the company in wh

Korvikt [17]

Answer:

The correct answer is: High level of job involvement.

Explanation:

Job involvement refers to the voluntary interest employees have for the job position they have at work. It is typically the result of individuals playing roles they like or that represent part of their self-realization. Job involvement is not only intrinsic but can also be acquired by a different set of practices.

7 0

3 years ago