One reason the Chinese buy a great deal of Canadian government debt is because: None of these statements is true. they know the risk involved is lower for Canadian government bonds than it is for any other government bond in the world. they have dollars left over from the sale of their goods to Canada and want to buy something dollar denominated. the rate of return for Canadian government bonds is higher than any other investment.
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- There are many tax rules and regulations you should be aware of when investing-whether it be in stocks; bonds; mutual funds; real estate; or collectibles such as artwork, antiques, gems, memorabilia, stamps, and coins. Capital gains are proceeds derived from these types of investments. Unless they are specified as being tax-free, such as municipal bonds, you must pay capital gains taxes on these proceeds. Capital gains are taxed in one of two ways. If the investment is held for one year or less, this is considered short-term and is taxed as ordinary income at your regular income tax rate. As this is written, if the investment is held for more than one year, it is considered long-term and qualifies for various tax discounts, as follows for single taxpayers with earnings as shown below. Stocks Held Capital Gains Rates Up to $38,700 $38,700–$426,700 Over $426,700 Over 1 year(long-term) 0% 15% 20% (a) If you are in the 25% tax bracket for ordinary income and have a 15% capital…"A corporation is trying to decide whether to buy the patent for a product designed by another company. The decision to buy will mean an investment of $9.6 million, and the demand for the product is not known. If demand is light, the company expects a return of $2 million each year for the first three years and no return in the fourth year. If demand is moderate, the return will be $2.73 million each year for four years, and high demand means a return of $5.4 million each year for four years. It is estimated the probability of a high demand is 0.47, and the probability of a light demand is 0.21. The firm's interest rate is 15.7%.Calculate the expected present worth of the patent. Express your answer in millions of dollars. For example, if the answer is $12.3 million, enter 12.3. (All figures represent after-tax values.)"All of the following are examples of debt capital, except: (a) Mortgage on equipment (b) Long-term bonds (c) Short-term loan from a bank (d) Preferred stock
- In early 1999 an investor bought 1000 shares of skandia for K127 per share. During the year dividends were received at K1.15 per share.sellig price per share is K180 a)What is the investor's total return in K? B)Capital gains, dividend yield, and total return in percentage terms?suppose your company needs $43 million to build a new assembly line. your target debt-equity ratio is .75. the flotation cost for new equity is 6 percent, but the flotation cost for debt is only 2 percent. your boss has decided to fund the project by borrowing money because the flotation costs are lower and the needed funds are relatively small.The __________, often used in financial economics, is a method of valuing a company's stock by using predicted dividends and discounting them back to present value. The idea is that the value of a stock is the present value of all future dividends it is expected to provide. A) Dividend Discount ModelB) Capital Asset Pricing ModelC) Efficient Market HypothesisD) Arbitrage Pricing Theory
- An investor company purchased 65,000 of the 200,000 outstanding shares of the investee company's common stock for $347,000 on January 1, 2021. During 2021, the investee company declared dividends of $31,000 and reported earnings for the year of $249,000. If the investor company uses the equity method of accounting for its investment in the investee company, it should report Investment Income from the investee company for 2021 in the amount of $__________. (Do not round your answer for any part of the computation.)120.) Which of the following is not economic investment? The purchase of a drill press by the Ajax Manufacturing Company. Construction of a small heating and air conditioning repair facility. The purchase of 100 shares of AT&T by a retired business executive. The building of a new assembly line for Ford Motor Company.Which one of the following statements is FALSE? Group of answer choices If investment per worker is less than depreciation per worker, then capital per worker decreases. If investment per worker exceeds depreciation per worker, then capital per worker increases. In steady-state, investment equals to depreciation. In steady-state, capital per worker keeps growing steadily.
- Which of the following statements are true? a. If intangible capital is inseparable from the firm itself, then the firm is better off choosing the strategy of exporting and licensing. b. Trade restrictions and trade-based sanctions imposed by a foreign based government are examples of economic risk. c. An interest rate basis swap involves two parties paying fixed rates against different reference rates. d. A forward forward contract specifies the principal, interest rate, commencement date of the future interest rate period and the ending date of the future interest period. e. All of the following statements in this question are true.An investor has $24,000 to invest in bonds of AAA and B qualities. The AAA bonds yield an average of 6% and the B bonds yield 10%. The investor requires that at least three times as much money should be invested in AAA bonds as in B bonds. How much should be invested in each type of bond to maximize the return? What is the maximum return? Define the variables needed to solve this problem. Organize your given information. (This part NOT graded, but encouraged.) Write the complete linear programming problem, which includes the objective function and all constraints. Graph and make sure all lines are labeled and shaded/solution region is clear and easy to identify. Create a corner point chart. Remember to mark your solution. Answer in a complete sentence or two: How much should be invested in each type of bond to maximize the return? What is the maximum return?All of the following mean the same as Minimum Attractive Rate of Return except: (a) Hurdle rate (b) Inflation rate (c) Benchmark rate (d ) Cutoff rate