ABC Corp. wants to save $1,000,000 to buy some new equipment four years from now. The plan is to set aside an equal amount of mo
1 answer:
In order to achieve its goal, the amount the firm should save each quarter is $56,033.97
The formula that can be used to determine the amount that the company should save every month to achieve its goal is :
Amount = future value / annuity factor
Annuity factor =
- Future value = amount it wants to save in 4 years = $1 million
- r = interest rate = 5.75% / 4 = 1.4375%
- n = number of years = 4 x 4 = 16
Annuity factor = [(1 + 0.014375)^16 - 1] / 0.014375
= 17.846317
Amount = $1,000,000 / 17.846317
= $56,033.97
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Answer:
Weight of debt = 57.83 %
Explanation:
given data
number of shares = 7,100
price = $94 per share
number of bonds = 600
mature time = 30 year s
coupon rate = 6.8 percent
bonds par value = $2,000
sell = 108.5 percent
stock outstanding = 6,000 shares
stock outstanding price = $47 per share
to find out
capital structure weight of the debt
solution
first we get here Equity market value that is express as
Equity market value = number of shares × price per share
Equity market value = 7100 × $94
Equity market value = $667,400
and
current debt value will be here as
current debt value = number of bonds × price per bond
current debt value = 600 × (1.085 × 2000)
current debt value = $1,302,000
and now Preferred stock value will be
Preferred stock value = stock outstanding × stock outstanding price
Preferred stock value = 6,000 × $47
Preferred stock value = $282000
and total capital will be as
Total capital = Equity market value + current debt value + preferred stock value ..................1
put here value
Total capital = $667,400 + $1,302,000 + $282000
total capital = $2251400
so here Weight of debt will be
Weight of debt = debt value ÷ total capital ..............2
Weight of debt =
Weight of debt = 0.578306
Weight of debt = 57.83 %
Answer:
<em>1. In this labor market, a minimum wage of $9.00 is binding : </em><em>FALSE</em>
<em>2. In the absence of price controls, a shortage puts upward pressure on wages until they rise to the equilibrium : </em><em>TRUE</em>
<em>3. If the minimum wage is set at $12.50, the market will not reach equilibrium : </em><em>TRUE</em>
<em>4. Binding minimum wages cause frictional unemployment : </em><em>FALSE</em>
Explanation:
<em><u>Question has been attached here</u></em>
Unemployment is the term used to define those who are willing and are actively seeking work but cannot find any. A minimum wage is a price control, in the form of a price floor imposed by government legislation in order to protect laborers from low wages. Paying anything below the minimum wage is against the law.
<em>1. In this labor market, a minimum wage of $9.00 is binding : </em><em>FALSE</em>
A minimum wage is binding only if it is set above the equilibrium price. In this scenario, the equilibrium price is at $12. Hence, $9 is not binding since a shortage of labor would gradually raise the price to the equilibrium.
<em>2. In the absence of price controls, a shortage puts upward pressure on wages until they rise to the equilibrium : </em><em>TRUE</em>
When there is a shortage in the market, it means that the quantity supplied is higher than the quantity demanded. With any particular commodity such as bread or rice, a shortage creates a rise in price. Just as that, a shortage of workers creates an upward pressure on the price (wage). Since there are no price ceilings, market will reach equilibrium.
<em>3. If the minimum wage is set at $12.50, the market will not reach equilibrium : </em><em>TRUE</em>
As shown in the diagram, the market equilibrium is $12. If the minimum wage was $12.50, there would be a surplus of labor (quantity supplied is higher than quantity demanded). Naturally, this may cause a downward pressure on wages until it reaches $12. However, when a minimum wage is imposed at $12.50, it cannot fall below that level. Thus, the market will not reach the equilibrium.
<em>4. Binding minimum wages cause frictional unemployment : </em><em>FALSE</em>
Frictional unemployment is a type of unemployment that occurs when workers are temporarily unemployed while switching between jobs. It is normal and occurs even in the healthiest of economies. A binding minimum wage is more likely to cause structural unemployment. This occurs when there is a mismatch between the skills of the labor force and the skills expected to be possessed by employers to do a particular job. Hence, even if jobs are available, the laborers are not suited to do them and thus are unemployed.
