1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Aneli [31]
3 years ago
15

1. Suppose two types of firms wish to borrow in the bond market. Firms of type A are in good financial health and are relatively

low risk. The appropriate premium over the risk-free rate of lending to these firms is 2%. Firms of type B are in poor financial health and are relatively high risk. The appropriate premium over the risk-free rate of lending to these firms is 6%. As an investor, you have no other information about these firms except that type A and type B firms exist in equal numbers. a. At what interest rate would you be willing to lend if the risk-free rate were 5%
Business
1 answer:
Olin [163]3 years ago
8 0

Answer:

Type A is 7%, type b is 11%

Explanation:

We have these two firm's as type a and type b

For type A

Interest would be = risk Free rate of 2% + risk free rate of 5% = 7%

For type B

= Risk free rate of 5% + risk free rate of 6% = 11%

I would use the average of this two 9% as interest but this is not going to work for type A because this interest rate is too high. People won't want to pay this much.

You might be interested in
Bryson Corporation purchased a limited-life intangible asset for $1,162,500 on May 1, 2018. It has a remaining useful life of 15
Nastasia [14]

Answer:

$206,667

Explanation:

Calculation for What total amount of amortization expense should have been recorded on the intangible asset by December 31, 2020

Using this formula

Total Amortization expense=Cost/useful life*Number of months

Let plug in the formula

Total Amortization expense=$1,162,500/180*32

Total Amortization expense=$206,667

Note that 15 years*12months will give us 180 months which is the useful life while May 1, 2018 - December 31, 2020) will give us 32 months

Therefore the total amount of amortization expense should have been recorded on the intangible asset by December 31, 2020 will be $206,667

5 0
3 years ago
Al, walks in off the street, says the grounds could use some sprucing up, and offers to do it for $8 an hour. Management gives h
Rufina [12.5K]

Answer:

<u>Option B</u> must pay him as an employee, withhold appropriate taxes and issue a W-2 at year end

Explanation: He is paid based on hours worked, and uses the company equipment thus is an employee who is controlled by an employer. The independent contractors buy their own supplies, provide their own equipment and paid based on tasks performed

4 0
3 years ago
If there is a shortage of loanable funds, then:
lana66690 [7]

Answer: The correct answer is "d. there will be no shifts of the curves, but the real interest rate rises.".

Explanation: If there is a shortage of loanable funds, then: there will be no shifts of the curves, but the real interest rate rises.

this causes as the interest rate rises to equilibrium the amount offered of loanable funds increases and the quantity demanded of loanable funds decreases

7 0
3 years ago
What must the Nederlander Organization do effectively to take its musicals to foreign markets?
mart [117]

The Nederlander Organization must effectively use teaser and revealers promotion campaigns to take its musicals to foreign markets.

Option a

<u>Explanation:</u>

Nederlander Organization will adopt to the use of teaser and revealers promotion campaigns for its  musical foreign market. After doing the market analysis and known about the customer’s interest the company will go with the strategy called revealers promotion campaigns.

This is an advertising campaign which creates a curiosity in the minds of consumers till the brands last ad. This type of campaign will keep the consumers always think about the product and ad which is going to be launched soon.  

4 0
3 years ago
The Lend-Lease Bill, introduced in Congress: Group of answer choices authorized the president to sell, transfer, lend, lease, or
tankabanditka [31]

Answer:

Authorized the president to sell, transfer, lend, lease, or otherwise dispose of other equipment and supplies to any country whose defense the President deems vital to the defense of the United States.

Explanation:

Lend-Lease Act

This bill was said to come into existence on 11th of March, 1941. The Congress passed the Lend-Lease Act. The legislation gave the President at that time, President Franklin D. Roosevelt the right, powers to sell, transfer, exchange, lend equipment to any country to help it defend itself against the other powers.

It was said that with the Lend-Lease bill stated that country of any kind whose defense the President thinks is very important to the defense of the United States will be given or can be able to receive military equipment, supplies, and other necessary materials even if that country is unable to generate funds to pay for those items.

6 0
3 years ago
Other questions:
  • A decrease in input costs in the production of LCD televisions caused the price of LCD televisions to decrease. Holding everythi
    11·1 answer
  • One advantage of using the internet as an advertising medium is
    5·1 answer
  • How long a company holds inventory before selling it can be measured by dividing cost of goods sold by the average inventory bal
    5·1 answer
  • Criteria for forming segments involve both similarities and differences. In terms of the needs of buyers, the similarities must
    7·1 answer
  • Bob, CPA, has a client with a strong belief that he is correct about an aggressive but creative tax position. Bob thinks otherwi
    15·1 answer
  • 3. Why are many resources allocated through markets?
    7·1 answer
  • If budgeted beginning inventory is $9,150, budgeted ending inventory is $10,420, and budgeted cost of goods sold is $11,110, bud
    15·1 answer
  • Explain one advantage of using retained profit as a source of finance. ​
    13·1 answer
  • A sole proprietor in the 37% tax bracket pays her 16-year-old son a reasonable salary of $14,000 for services performed for the
    8·1 answer
  • You live near the beach and want to give snorkeling lessonsYou estimate that after expenses , you can earn $10 per lesson. Each
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!