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choli [55]
3 years ago
15

A key underlying assumption of MM Proposition I without taxes is that: corporations are all-equity financed. individuals can bor

row at lower rates than corporations. individuals and corporations borrow at the same rate. financial leverage increases risk. managers always act to maximize the value of the firm. True or false?
Business
1 answer:
MrRa [10]3 years ago
5 0

Answer:

C.  Individuals and corporations borrow at the same rate.

Revised Question:

A key underlying assumption of MM Proposition I without taxes is that:

A.  financial leverage increases risk.

B.  individuals can borrow at lower rates than corporations.

C.  individuals and corporations borrow at the same rate.

D.  managers always act to maximize the value of the firm.

E.  corporations are all-equity financed.

Explanation:

Modigilani-Miller gave theories about the optimal capital structure of the firms. They proposed thier theories under <em>taxes and and without taxes</em> economies. They gave two propositions under each economy.

MM proposition I without taxes states that value of of firm with equity finance and value of a firm with debt finance are equal. So the capital structure of a firm is irrelevant in decision making.

The underlying assumption of the proposition is:

Presence of asymmetric information due to which, investor's and firm's cost of borrowing money is same.

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Getting the listener’s full attention, questioning him or her, and asking him or her to paraphrase the message are all technique
timama [110]

Answer:

poor listening

Explanation:

Based on the information provided within the question it can be said that this is done in order to overcome poor listening. This refers to individuals who get distracted when listening and hear/understand very little to nothing of what they were supposed to be listening to. By making sure their attention is on you and asking them to repeat what you just said allows the individual to pay more attention to what you are saying and helps the information stick.

3 0
3 years ago
Volusia, Inc. Is a U. S. -based exporting firm that expects to receive payments denominated in both euros and Canadian dollars i
NARA [144]

From the details that are contained in the question, the portfolio standard deviation is 0.0544 or 5.44%

<h3>How to solve for the portfolio standard deviation</h3>

w1 = weight of euros 1 = 500000/800000

w2 = weight of canadian dollars = 300000/800000

Standard deviation 1 = 8%

Standard deviation 2 = 3%

Correlation coefficient = 0.30

(w1*σ1)² + (w2*σ2)² + (2* w1*σ1* w2*σ2 * 0.30)^0.5

((0.625*0.08)^{2} +(0.375*0.03)^{2} +(2*0.625*0.08*0.375*0.03*0.3)^0^.^5\\\\= 0.0544

Therefore the portfolio standard deviation is given as 0.0544 or 5.44%

Read more on standard deviation here: brainly.com/question/475676

5 0
2 years ago
Quick Corp. has $270,000 of outstanding accounts receivable. On March 10, 1988, Quick assigned a $30,000 account receivable due
Ronch [10]

Answer:

quick

Explanation:

Quick

Taft Bank is entitled to collect the money from Quick Corp. and not Pine because it failed to notify Pine of the assignment from Quick Corp. on time. So, now he can collect money from Quick Corp. only.

4 0
3 years ago
Amelia has her money in a CD earning 2 percent interest. How long will it take for her money to double?
dusya [7]
It will take her 50 months if the interest grows every months. Here's the reason why:
=> in order to double up your money you need to have a 100% interest and since Amelia only have 2% interest, she needs 50 months to get the an interests that will double up her money.
6 0
3 years ago
Bloomington Inc. exchanged land for equipment and $2,700 in cash. The book value and the fair value of the land were $105,400 an
erica [24]

Answer:

The answer is c. Equipment: 87,200; Gain/(loss): (15,500).

Explanation:

Since the exchange has commercial substance,

- Fair value of the equipment is equal to: Fair value of the land - Cash consideration receipt = 89,900 - 2,700 = $87,200.

- The disposal of land in the Balance sheet following the exchange needs to account for the differences between Book value of land and Fair value of land. Since Fair value is now smaller than Book Value, a Loss has to be recognized at the amount calculated as (Fair value - Book value) = (89,900 - 105,400) = $(15,500).

Thus, the answer is c. $87,200 $(15,500).

5 0
3 years ago
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