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Sindrei [870]
3 years ago
10

Briefly describe the differences among international bond, bank and equity markets. Would you support an MNC that favors financi

ng through bonds issues or would you rather support one
Business
1 answer:
Katen [24]3 years ago
6 0

Answer:

Answer to this question is explained below in detail.

Explanation:

This question is not complete. This has two parts a) and b). Part a) is complete and b) is incomplete. I have written down the complete question and will try to answer completely.

a) Briefly describe the differences among international bond, bank and equity markets.

b) Would you support an MNC that favors financing through bonds issues or would you rather support one that favors financing through stock issues?

Solution:

a) We are asked to differentiate between international bond, bank and equity markets.

All three terms are related to raising funds, lending or borrowing to raise the capital for some government or for any company.

Let's start with International Bonds first.

International Bonds : In this globalized world, a company can raise its capital through getting debt in the form of international bonds from international institutions over the assets value of the company. For example: XYZ company has a asset value of 10 million dollars, so it can get international bonds accordingly.  

International Equity markets: Again due to interlinked world, companies and institutions all over the world can invest their funds in any company around the globe. And through equity markets companies can sell their shares to raise its capital depending upon the asset value of the company.

International Banks: International banks are international institutions which raise capital in particular country and have branches all over the world. It can lend funds to companies on particular interest rates. Furthermore, all those bonds are generated in these banks as well.

b) Supporting an MNC that favors financing through bonds issues or through equity markets or stock issues will depend on the debt/equity ratio of the company. If it is low, company should go for debt or bond issues. If it is high then it should opt for stock issues.

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Answer and Explanation:

1. The preparation of the department contribution report is presented below:

                                        WHOLESALE GUITARS

           Income statement showing Departmental contribution to overhead

                           For year Ended December 31,2015

Particulars      Acoustic Dept          Electric Dept             Combined

Sales              $112,500                  $105,500                    $218,000

Less : Cost of Goods sold  

                   -$55,675                    -$66,750                    -$122,425

Gross Profit    $56,825                    $38,750                $95,575

Direct Expenses

Depreciation Expenses  - Equipment   $10,150     $9,000     $19,150

Salaries Expenses       $17,300             $13,500                       $30,800

Supplies Expenses     $2,030             $1,700                         $3,730  

Total Direct Expenses   $29,480         $24,200                     $53,680

Indirect Expenses

Advertising Expenses                                                                 $14,325  ($8,075 + $6,250)

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Utilities Expenses                                                                       $5,595  ($3,045 + $2,550)

Total indirect Expenses                                                             $31,975

Net Income              $27,345            $14,550                                $9,920

2.  As we can see that there is a loss so electric should not be eliminated

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3 years ago
Which business model would be most appropriate for the following situation: When the product or services requires great skill fr
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JV, a corporation, was formed in 2013 to design and manufacture electric cars. JV is 60 percent owned by AutoCo (a car manufactu
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Answer:

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Basically ElectricCo's contribution is technology, and AutoCo provides everything else, but both control the company with one side (ElectricCo) not having enough money to invest but doing so through financing.

b. Which entity, if any, should consolidate JV?

AutoCo must include JV in its consolidated balance sheet since it owns 60% of the company and the products manufactured by JV are sold under AutoCo's brand.

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A developer of a new townhome community estimates that there will be 1,400 home (all types) sales in University City over the ne
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Answer:

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