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?
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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.
Adam Smith’s perception which self-interested motives underpin even charitable activities through apparently selfless people appeared originally into his primary major book that was entitled: (1) Theory of Moral Sentiments [1755]. (2) Leviathan
Why is the problem of unemployment a part of the subject matter of economics?
Question The Current Account captures international fund flows due to net income on (past) investments, net transfers, and i._______________________________, general
Illustrate the Risks involved with bonds?
Give a brief introduction of the term Cost of capital?
Briefly describe composite cost of capital? And also describe the procedure to calculate composite cost of capital?
As illustrated by Adam Smith that there are two innate psychological attributes of humans. One is which people have a powerful wish to better their individual circumstances. The other is as human beings so we are: (1) more interested
Cingular and Alltel involve in aggressive and expensive advertising for cell-phones. A reason for this advertising may be: (1) attempts to increase market share. (2) predatorily drive other firms by the market. (3) to increase the use of cell phones.
Elucidate Reliance on technology and capital goods of the market system?
Explain: “Even though parking meters may yield little or no net revenue, because of the rationing function they perform nevertheless be retained”
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