Consumer prices will increase
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Assume the government introduces a lump-sum tax on each firm within a
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- The government will be decreasingincome taxes. To an entity producingluxury bags, it would: A. Expect lower economic growth and may plan to produce less of these bags.B. Expect higher economic growth and may plan to produce more of these bags.C. Expect lower economic growth and may plan to produce more of these bags.D. Expect higher economic growth and may plan to produce less of these bags.which of the following is an example of unsystematic risk? decrease income tax for all company soft tech won a new sales contract increase in inflammation rate deccrease in government bond rateIf the present value of a firm's marginal financial distress costs are equal to the present value of its marginal tax shieid, the companySelect one:a.has too much debt in its capital structureb.should increase the amount of debt in ts capital structurec. has an optimal capital structured.shouid reduce the amount of equity in its capital structuree:none of the abovt
- Global Giant, a multinational corporation, has a producing subsidiary in a low-tax rate country and a marketing subsidiary in a high-tax country. If Global Giant wants to minimize its worldwide tax liability, we would expect Global Giant to ________. A. stop producing in the low tax rate country B. stop marketing in the high tax rate country C. establish a low transfer price when the producing unit sells to the marketing unit D. establish a high transfer price when the producing unit sells to the marketing unitIf the present value of a firm’s marginal financial distress costs are less than the present value of its marginal tax shield, the company Select one: a. has too much debt in its capital structure b. should increase the amount of debt in its capital structure c. has an optimal capital structure d. should increase the amount of equity in its capital structure e. none of the aboveYou believe that all prices will be rising more than expected, and that rising prices will result in lower earnings for industrial companies that use a lot of petroleum-related products in their operations. You also believe that the effects on this sector will be magnified because consumer demand will fall as oil prices rise. You locate an exchange traded fund, QLT, that represents a basket of industrial companies. You don't want to short the ETF because you don't have enough margin in your account. QLT is currently trading at $32.49. You decide to buy a put option (for 100 shares) with a strike price of $34.05, priced at $2.22. It turns out that you are correct. At expiration, QLT is trading at $30.20. Calculate your profit. (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Calls Strike Expiration $30.20 November $34.05 November QLT: Materials-$32.49 Price $1.22 $1.22 come The profit of the trade before trading costs is $. (Round to the…
- Hi, please help me with the following questions Suppose the government buys up all of the farmers' output at the floor price and then sells the output to consumers at whatever price it can get. Under this scheme, what is the price at which the government will be able to sell off all of the output it had purchased from farmers? What is the revenue received from the government's sale? In this problem we have considered two government schemes: A price floor is established and the government purchases any excess output and The government buys all the farmers' output at the floor price and resells at whatever price it can get. Which scheme will taxpayers prefer?Which of the following is a political risk to a company's bottom line? Spot exchange rates Changing tax rates Stable exchange rates Forward tax ratesSuppose a company increases the price of its product and demand hardly declines.which of the following will increase? A) profit margin B) return - on - equity C) taxes D) all the above
- You believe that oil prices will be rising more than expected, and that rising prices will result in lower earnings for industrial companies that use a lot of petroleum-related products in their operations. You also believe that the effects on this sector will be magnified because consumer demand will fall as oil prices rise. You locate an exchange traded fund, QLT, that represents a basket of industrial companies. You don't want to short the ETF because you don't have enough margin in your account. QLT is currently trading at $32.68. You decide to buy a put option (for 100 shares) with a strike price of $33.90, priced at $2.26. It turns out that you are correct. At expiration, QLT is trading at $30.05. Calculate your profit. (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) QLT: Materials-$32.68 Calls Price Strike Expiration $30.05 November $1.26 $33.90 November $1.26 The profit of the trade before trading costs is $ Puts Expiration…In the short-run macro model, if aggregate expenditure is less than GDP, output in the future will a. decline as firms cut production to stop the buildup of inventories b. increase as firms cut their prices to try to stop depletion of inventories c. remain unchanged indefinitely unless government takes action d. decline as firms increase their prices to stop the buildup of inventories e. increase as firms increase production to try to stop depletion of inventoriesIf you take corporate taxes and the cost of financial distress are into consideration, the market value of a firm should equal the value of the all-equity firm the present value of the tax shield the costs of financial distress. O plus; plus O plus; minus O minus; minus O minus; plus
