Why are corporations more likely to raise funds externally by debt instead of equity?
A) moral hazard is less of a problem with debt contracts
B) transactions costs tend to be higher in the stock market than bond market
C) to avoid paying dividends
D) interest rates tend to be lower than dividend rates
A
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Data on after-tax income and consumption spending for the Smith family are given in the table below.After-tax IncomeConsumption Spending$9,000$18,10014,00022,60019,00027,10024,00031,600Based on these data, the Smith family has a marginal propensity to consume of
A. 0.75. B. 0.8. C. 0.6. D. 0.9.
If the bank is selling euros for $0.89, then what is the implied euro price of the dollar?
A) 2.00 B) 1.99 C) 2.32 D) 1.12
You have been promised a payment of $400 in the future. In which of the following cases is the present value of this payment the lowest?
a. You receive the payment 4 years from now and the interest rate is 4 percent. b. You receive the payment 4 years from now and the interest rate is 5 percent. c. You receive the payment 5 years from now and the interest rate is 4 percent. d. You receive the payment 5 years from now and the interest rate is 5 percent.
The more time that elapses, the
A. more price elastic is the demand for the product. B. greater the income elasticity of demand for a product. C. smaller the income elasticity of demand for the product. D. less price elastic is the demand for the product.