State whether each of the following involves debt financing or equity financing: (a) A bond issue for $3,500,000 by a city-owned utility (b) An initial public offering (IPO) of $35,000,000 in common stock for a dot-com company (c) $31,000 taken from your retirement account to pay cash for a new car (d) A homeowner’s equity loan for $40,000

State whether each of the following involves debt financing or equity financing: (a) A bond issue for $3,500,000 by a city-owned utility (b) An initial public offering (IPO) of $35,000,000 in common stock for a dot-com company (c) $31,000 taken from your retirement account to pay cash for a new car (d) A homeowner’s equity loan for $40,000

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter10: Financing And Producing Goods

Section10.2: Types Of Financing For Business Operations

Problem 1R

See similar textbooks

Similar questions

Identify the following as either equity or debt financing: bonds, stock sales, retained earnings, venture capital, short term loan, capital advance from friend, cash on hand, credit card, home equity loan.
Paid-up additions A) Affect both cash and loan value of the policy B) Don't affect the cash value of the policy C) Don't affect the loan or cash value of the policy D) Only affect the cash value of the policy
A corporate bond has a face value of $1000 with a maturity date 20 years from today. The bond pays interest semiannually at a rate of 8% based on the face value (this means 8%/yr/semi). The interest rate paid on similar corporate bonds has decreased to a current rate of 6%/yr/semi (this would be i – the yield rate). What is the market value of this bond, or what should an investor pay for the bond?
Assume I won 8 million dollars in a lottery. I could take my winnings in installments of 2 million dollars a year for four years or a lump sum of fewer than 8 million dollars. If I take the installments, my first installment would come the day I claimed my winnings at the state lottery office. Assume that the interest rate is 7% per year and that there are no taxes on the winnings. Calculate what the lump sum should be so that it would exactly equal the present value of the stream of the future stream of installments from the lottery. You must show and explain your work to be given credit for this assignment. What would your answer change be if the first installment in the question above did not come until one year after I claimed my winnings. You must show and explain your work to be given credit for this assignment. Just three or four sentences for each question. However, I do need to see your work.
3) analysis refers to calculations that measure an organization's financial hea A) Cash-flow B) Feedback C) Ratio D) Specific E) General
Answer it correctly please. I ll rate accordingly. My last attempt. Typed answer only. Do it fast and correct. Two financing options are being evaluated. Which should I select? Option 1 60% equity at 12% and a loan for the balance at 9% OR 20% equity and the balance load at 12.5% per year.
You took an amazing class at the U that changed your life, so now you are going to invest for your retirement. Your tax bracket is 25% federal and 5% state. Your investment is in a federally and state tax free account that earns 11% each year, what interest rate are you effectively earning on your investment?
Bond price S₁ $900 $850 Q1 Q2 S: Di Quantity of bonds per period (Face value $1,000; maturity 1 year)
11) Devin purchased a $3500 bond paying 4.5% annual simple interest after graduating from college. It is now 35 years later and he decides to cash in the bond. What is the value of this bond now? Round your answer to the nearest dollar. A) $16,336 B) $3537 C) $9013 D) $5513 E) $8632
Jefferson qualifies for an income-adjusted monthly payment of $445. If Jefferson has a subsidized student loan of $46,000 at an annual interest rate of 4% (compounded monthly), how many months are required to repay the loan?
A student takes out a $10,000, 10-year loan with two possible repayment plans, (i) immediate repayment or (ii) a grace period during the college years. The student takes 5 years to graduate. The interest rate is 8%, compounded annually and the loan is paid off as a yearly lump sum. Since the bank is a for-profit business (beholden to its shareholders and required to maximize profit), the bank intends to receive the same return on this loan either way. How much are the annual payments under option (i) and option (ii)
What are the Guidelines for Selecting a MARR?