Which of the following is a constrain for the investors? a. The mentality tontake the high risk b. Tax exemption on security trading c. Getting high income d. Liquidity needs

Q: Discuss whether the director’s view (Miss Kay) that issuing traded bonds will decrease the weighted…

A: Weighted average cost of capital is the average cost of procuring funds from various sources such as…

Q: what type of risk?

A: Factors or risk that affect the entire market is known as Systematic Risk. Changes in interest rate…

Q: A) Evaluate the importance of market efficiency to the finance manager.  B) State and explain five…

A: Importance of market efficiency to the finance manager.   Fundamental Analysis: Examination…

Q: What is meant by the term ‘financial distress’. If we assume that financial distress exists, explain…

A: Financial obligations are liabilities of an entity towards outsiders such as suppliers, vendors,…

Q: What is the difference between inside view and outside view in investing? Give a scenario where they…

A: Inside View in investing comes from the individual own experience of investing and they actively…

Q: ance.perhaps you have come across behavior or aspect of financial market that you think can be…

A: Introduction : In simple words, behavioral finance refers to the study branch of finance which deals…

Q: What are the risks and rewards of investing in the stock market as compared to the bond market? b.…

A: Because you have posted multiple questions, we will answer only the first question and for the…

Q: Which of the following is not a determinant of investment? a) The efficiency of capital equipment…

A: To increase capital assets, business do investments in property, fixed assets, financial market,…

Q: Question 2- From a tax-paying investor's point of view, a stock repurchase: a. has the same tax…

A: Introduction: Stock repurchases ensures that by buying outstanding shares of its own stock, a…

Q: “The Capital Asset Pricing Model [CAPM] assumes that the stock market is dominated by…

A: I do not completely agree with the following statement because Capital Asset pricing model is only…

Q: a. Calculate the present value of interest tax shield, you may assume that you can discount any…

A: Interest tax shield is the tax benefit which is derived by adding debt in the capital structure of…

Q: Which of the following is true ? Select one : a . Investment bankers earn a spread based on the…

A: Investment bankers (IB) are the financial organisations which provide advice for the securities to…

Q: it better to finance a company thru debt or thru equity? Why? What are the downside and upside to…

A: A business can raise funds predominantly either by  Issuing Equity, or Borrowings Loans, Issuing…

Q: financial leverage affect stockholders' control position? d) How does the tax structure influence a…

A: How does the tax structure influence a firm's willingness to finance with debt? It allows a company…

Q: ) Snakebite effect (ii) House-moneyeffect ( iii) Endowment effect (iv) Disposition effect (v)…

A: (i) Snakebite effect – It is the effect when one strategy of the investor failed earlier. The…

Q: Which of the following statements is CORRECT? O a. Money markets are markets for long-term debt and…

A: Option a. is incorrect because money markets deal in short term securities having a maturity period…

Q: hedge

A: Introduction: The term hedging refers to a strategy used by the investors in order to protect…

Q: QUESTION 4 Which of the following statements is correct? O A. The tax benefit from using debt…

A: The leverage of the firm indicates the level of debt employed by the organization. If the usage of…

Q: Political stability is a major factor of which one of the following? business risk inflation risk…

A: "Hi, Thanks for the Question. Since you asked multiple questions, we will answer first question for…

Q: 19. The question "Did the common stockholders receive an adequate retum on their investment?" is…

A: Financial ratios  Financial ratios are those ratios that are derived using the numerical values…

Q: Which of the following factors influence a firm's ability and/or willingness to pay dividends?   a.…

A: A dividend refers to the distribution of profits to the shareholders of the company. A dividend is…

Q: Which of the following statements describes the cost of capital?…

A: Cost of Capital refers to that rate of return that a firm expects to earn from its investments for…

Q: e. True/False/Explain: “All financiers (i.e., lenders and equity holders) of a firm's assets expect…

A: The question is based on the concept of the minimum required rate of return. The minimum return is…

Q: Factors in financial crises include : a. The existence of hedge funds and tax havens b. A stock…

A: A financial crisis is a situation in which the financial assets in the economy lose their values and…

Q: A. Briefly explain the problem of moral hazard in: (i) Equity financing (ii) Debt financing B.…

A: When there is an rise in the expected loss because of individuals and companies behaving carelessly,…

Q: Why do equity investors often use borrowed funds? Explain positive and negative financial leverage…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: a) – Explain the concept of Tax Deduction in WACC. Does this tax deduction make debt finance Cheaper…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Think from the borrower (management) and NOT lender (investor) points of view. Which is the less…

A: Analysis of the given options from the borrower points of view:   a) Bond financing- Bond financing…

Q: Which of the following are the MAIN REASONS for an investor to invest in managed funds? I -  To…

A: Answer: The correct answer is Option (A) I, II and III only. A managed fund is nothing but a pooling…

Q: Which is correct about financial securities? a. Financial securities guarantees return to investors.…

A: "Hi, Thanks for the Question. since you asked multiple question, we will answer the first question…

Q: Dividend changes may be used by management as a credible communication tool to signal investors…

A: “Hey, since there are multiple questions posted, we will answer first question. If you want any…

Q: Explain whether the following statements are true or false. Justify your answer and solve both the…

A: The term bonds refer to the debt instruments that are issued with a motive to raise debt from the…

Q: he concept of market efficiency underpins almost all financial theory and decision models. When…

A: Market efficiency is the degree to which current prices accurately represent all available, relevant…

Q: Which of the following about Treasuy inflation protected securities is NOT true:

A: A treasury inflation protected security is one which protects the investor from rising inflation.…

Q: Why would an investor want to have some sort of credit enhancement included in a securitization? a.…

A: In finance, securitization is the process of conversion of an asset, most commonly the conversion of…

Q: firm’s cost of equity, cost of debt, and cost of capital when the firm increases the amount of debt…

A: Note : As per the guidelines, only first question will be answered. Kindly post the remaining…

Q: . What effect does increasing inflation expectations have on the required returns of investors in…

A: Interest refers to the amount charged by the lender on the lent amount. The borrower of the loan is…

Q: Identify the following as either an advantage (A) or a disadvantage (D) of bond financing for a…

A: Definition: Long-term debt: Long-term debt refers to the obligations of a firm that are due and has…

Q: Which of the following is CORRECT? Select one: a. When calculating the cost of debt, a company needs…

A: From the given statement we have to find the correct once: 1) When the cost of debt is calculated,…

Q: Why is it important that in an underwriting the investment banker does not overvalue (overprice) or…

A: Companies/Firms appoint investment bankers as underwriters which provide underwriting service and…

Q: articipate in the ownership of the firm. (b) Investors in debt are paid interest. (c) Debt is more…

A: Debt capital consists of the securities that represent lenders or financial creditors to the firm.…

Q: ens to the firm’s cost of equity, cost of debt, and cost of capital when the firm increases the…

A: Note : As per the guidelines, only first question will be answered. Kindly post the remaining…

Q: The relationship between WACC and investors' required rates of return The required rate of return of…

A: WACC is the weighted average cost of capital. It is minimum return company should achieve to accept…

Q: Which statement is false regarding the Capital Asset Pricing Model?

A: CAPM Return Formula: Expected Return= Rf+ β(Rf- Rm) where,            Rf is Risk free return…

Q: Which of the following statements is true? Group of answer choices The Principle of Diversification…

A: Diversification is investing our money in different asset classes so that we can minimize risk

Functions of Financial Institutions

Financial institutions are businesses that are formed to deal with financial and monetary transactions. These organizations primarily accept deposits, advance loans, make investments, and provide foreign exchange services. Financial institutions include, but are not limited to, banks, insurance companies, trust companies, brokerage firms, and investment bankers. Because financial institutions play such an important role in the economy in terms of monetary transactions, regulating their activities has become a requirement for governmental authorities. As a result, the government creates a multitude of laws and regulations to oversee the activities of financial institutions.