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MArishka [77]
3 years ago
9

the spread between the interest rates on bonds with default risk and default-free bonds is called the:

Business
1 answer:
jeka57 [31]3 years ago
5 0

The spread between the interest rates on bonds with default risk and default-free bonds is called the risk premium.

A default-free bond is a bond in which the bond issuer would not miss scheduled payments of either the coupon or principal. Bonds issued by the government are generally considered to be default-free. This is because the government can print money to make payments.

A bond with a default risk is a bond in which the bond issuer can miss scheduled payments of either the coupon or the principal. Bonds issued by private individuals are generally considered to be bonds with default risk.

Bondholders usually demand a compensation for holding bonds with a default risk. This compensation is known as risk premium.

Risk premium = return on bonds with default risk - return on default- free bond.

To learn more, please check: brainly.com/question/4304080?referrer=searchResults

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Cost of Preferred Stock Torch Industries can issue perpetual preferred stock at a price of $57.00 a share. The stock would pay a
labwork [276]

Answer:

the company’s cost of preferred stock is 10.53%.

Explanation:

given information:

perpetual preferred stock = $57.00

a constant annual dividend = $6.00

to determine the company’s cost of preferred stock we can use the following formula

cost of preferred stock = \frac{ annual dividend}{preferred stock}

                                   = \frac{6.00}{57.00}

                                   =10.53%

therefore, the company’s cost of preferred stock is 10.53%.

8 0
3 years ago
On October 1, 20X4, Shaw Corp. purchased a machine for $126,000 that was placed in service on November 30, 20X4. Shaw incurred a
vichka [17]

Answer:

option (D)  $138,000

Explanation:

Data provided in the question:

Purchasing  cost of the machine = $126,000

Additional costs for this machine :

Shipping = $3,000

Installation = $4,000

Testing = $5,000

Now,

The cost of machine that should be reported

= Purchasing cost + Additional costs incurred

= $126,000 + $3,000 + $4,000 + $5,000

= $138,000

Hence,

The correct answer is option (D)  $138,000

8 0
4 years ago
Why does a price floor lead to surpluses?  Why does a price ceiling lead to shortages?  ​
Degger [83]

Answer:

Shortage: there is more demand than there is at the equilibrium price. There is also less supply than there is at the equilibrium price, thus there is more quantity demanded than quantity supplied.

Your pretty much short in supply and cant fulfill the demand

While surplus

When a price floor is set above the equilibrium price, quantity supplied will exceed quantity demanded, and excess supply or surpluses will result.

Theirs a a large amount of supply due to the pricing most likely beign high

Explanation:

7 0
3 years ago
Which of the following is NOT a characteristic of effective promotion? *
Alexxx [7]

Answer:

i think no.1

sssssss

8 0
3 years ago
How to get a workers permit at 14 If you drop out of school in Pennsylvania
lidiya [134]
Well, for one, yes you can work when you are 14 in Pennsylvania.
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To get a work permit, you must go to your school district to get your work permit, as they are responsible. This is for any student in any kind of school (online, traditional, charter, etc)
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hope this helps
8 0
3 years ago
Read 2 more answers
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