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3 years ago

Interest rates and decisions

Business

1 answer:

svetoff [14.1K]3 years ago

4 0

Answer:

a. No, the firm needs to take the volatility of short-term rates into account.

Explanation:

Short term interest rates are more volatile than the long term interest rates. If the company chooses to finance its operations solely from short term financing than it will need to incorporate the affect of volatility in the short term interest rates to identify the net returns. The volatility should be calculated with the risk factor and required rate of return of the funds.

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The Timken Company has announced a rights offer to raise $5.1 million. The company's stock currently sells for $34 per share, th

omeli [17]

Answer:

Right price =$33.50

Explanation:

<em>The theoretical ex-right price is the weighted average price at which shares are expected to settle after a right-issue,</em>

<em>It is the weighted average price of value of shares of the before-right price and the right price</em>

Ex-rights price

=(Before-right value of shares + Proceed from rights )/Total number of shares after rights issue

Number of rights issue units = amount to be raised /Right price per share

= $5.1 m/$30 = 170,000 units

Before - rights value = 1,207,000 × $34 = 41,038,000

Proceed from rights = 170,000 × $30 = 5,100,000

The ex-right price = (41,038,000 + 5,100,00)/(1,207,000 +170,000) units

Right price =$33.50

8 0

3 years ago

What is small business development

makvit [3.9K]

Answer:

Explanation:

Small Business Development Centers (SBDCs) provide business-related assistance and knowledge to help entrepreneurs start, run, and grow their businesses.

5 0

2 years ago

What is the main benefit of using a consistent system to label your files?

Ierofanga [76]

Answer:

D. It helps you keep track of each stage of the editing process

6 0

3 years ago

To maximize profits, a firm should continue to increase production of a good until?

Butoxors [25]

To maximize profits, a firm should continue to increase production of a good until marginal revenue is equal to marginal cost.

According to the cost-benefit analysis, a company should continue to increase production until marginal revenue is equal to marginal cost. A manager maximizes profit when the value of the last unit of product (marginal revenue) equals the cost of producing the last unit of production (marginal cost)

What Is Marginal Revenue?

Marginal revenue is the increase in revenue that results from the sale of one additional unit of output.

What Is Marginal Cost?

In economics, the marginal cost is the change in total production cost that comes from making or producing one additional unit.

to learn more about Marginal Revenue click below

brainly.com/question/13563292

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7 0

2 years ago

An investor is in a 30% combined federal plus state tax bracket. If corporate bonds offer 9% yields, what yield must municipals

Yuki888 [10]

Answer:

0.063 or 6.3% (or more)

Explanation:

Given:

Combined Tax Bracket = 30% = 30/100 = 0.30

Yields of corporate Bonds = 9% = 9/100 = 0.09

Yield to Shift Investors to choose municipal bonds = ?

Calculation:

Yield from corporate bond = (After tax yield) x Yield rate of corporate Bonds

= (0.70) x (0.09)

= 0.063 or 6.3%

Working note:

After tax yield = (1 - tax rate )

After tax yield = (1 - 0.30 )

After tax yield = (0.70)

so, they must give 6.3% yield

7 0

3 years ago