The financial investor about bonds
Describe three ways to finance corporate activity. Make a case that stocks are more risky for the financial investor than are bonds?
Expert
There are three ways to finance corporate activity: it can be done internally out of undistributed profits or Corporations can borrow from financial institutions or issue their own stocks or bonds.
Common stock is an ownership share in a corporation that gives a holder voting rights and a share of dividends. Bonds are promissory notes where the corporation promises to pay the holder a fixed amount in the future plus annual interest on the loan. A bondholder is not an owner, only a lender. Stocks are usually riskier than bonds. Bondholders have a “legally prior claim” against corporate earnings. Stock dividends cannot be paid until all interest payments due to bondholders are paid. Interest is guaranteed as long as the company is healthy, whereas dividend depends on profits.
When the prices for doughnuts and croissants are $.50 and $1 correspondingly: (w) the opportunity cost for one doughnut is two croissants. (x) this is better to buy two doughnuts than one croissant. (y) one croissant will make Pierre twice as happy as one doughnut. (z
Explain the cause of Trade barriers?
The opportunity cost of making an exact alternative is: (i) useful primarily as an indicator of relative prices. (ii) its nominal costs into terms of all other goods. (iii) the information which guides your decision. (iv) measured through the subjecti
What does high or low operating leverage specify?
Question: A country with a fixed or managed exchange rate would consider i.___________________ its currency to gain competitive advantage vis-à-vis its trade
Illustrate the 2nd function to promote and maintain competition?
If one decisionmaker in interdependent circumstances calibrates its decisions to the anticipated reactions of the other party, in that case the decisionmaker is engaged within: (1) psychological forecasting. (2) profit maximization. (3) collusion. (4) strategic behavi
Illustrate the changes in Demand, Supply and Equilibrium?
Elucidate redistribution of income?
Favor laissez- faire economic policies tended by Adam Smith, who also: (w) saw the requirement for several state intervention. (x) believed there were no conditions in which the government must intervene. (y) supported most government
18,76,764
1922943 Asked
3,689
Active Tutors
1433682
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!