The Triffin paradox suggests that
A. the U.S. dollar could never be a reserve currency.
B. eventually, reserve currencies will run deficits, which will lead to lack of confidence in the currency.
C. the more a currency is held in reserves, the stronger it is.
D. reserve currencies can never run deficits.
Answer: B
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Black Diamond, Inc., a manufacturer of carbon and graphite products for the aerospace and transportation industries, is considering several funding alternatives for an investment project. To finance the project, the company can sell 1,000 15-year bonds with a $1,000 face value, 7% coupon rate. The bonds require an average discount of $50 per bond and flotation costs of $40 per bond when being sold. The company can also sell 5,000 shares of preferred stock that will pay a $2 dividend per share at a price of $40 per share. The cost of issuing and selling preferred stocks is expected to be $5 per share. To calculate the cost of common stock, the company uses the dividend discount model. The firm just paid a dividend of $3 per common share. The company expects this dividend to grow at a
constant rate of 3% per year indefinitely. The flotation costs for issuing new common shares are 7%. The company plans to sell 10,000 shares at a price of $50 per share. The company’s tax rate is 40%. a) Calculate the company’s after-tax cost of long-term debt. b) Calculate the Company’s cost of preferred equity. c) Calculate the company’s cost of common equity. d) Calculate the company’s weighted average cost of capital. e) What is the company’s weighted average cost of capital without flotation costs?
Doubt that the correct product has been purchased is known as _____
a. psychological risk b. perceived risk c. cognitive dissonance d. information re-evaluation
Why are price wars more common in oligopolies than in pure competition markets?
What will be an ideal response?
Which of the following statements regarding MRP in services is TRUE?
A) MRP is for manufacturing only, and it is not applicable to services. B) MRP can be used in services, but only in those that offer very limited customization. C) MRP only works in services for demand that is independent. D) Services such as restaurant meals illustrate dependent demand, and they require product structure trees, bills-of-material, and scheduling. E) None of the above is true.