When securities are priced fairly, why would the original shareholders of a firm pay the present value of bankruptcy and financial distress costs?

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Answer 1

When securities are priced fairly this would mean that the stock of an organization has gone down considerably. This could also show the chances of bankruptcy.

The original shareholders of a firm pay the present value of bankruptcy and financial distress costs to reduce the cash flow which is available to the investors.

What is financial distress?It refers to the lost or reduced income. It refers to a condition where the company is unable to generate revenue and profit. This happens usually when there are high fixed costs. It also refers to a situation when the company cannot pay its creditors back.

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Related Questions

Two methods of capital investment analysis that incorporate the time value of money are:______.

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Two methods of capital investment analysis that incorporate the time value of money are -Net Present Value and Discounted Cash Flow

1- Net Present Value

Net Present Value reduces the expected future cash flows by a specific rate to arrive at their value in today's terms. After subtracting the initial investment cost from the present value of the expected cash flows, it can be  determined whether the project is worth pursuing. If the NPV is a positive number, it means it's worth pursuing while a negative NPV means the future cash flows aren't generating enough return to be worth it and cover the initial investment.

2- Discounted Cash Flow

With DCF analysis, the discount rate is typically the rate of return that's considered risk-free and represents the alternative investment of the project. The present value is the value of the expected cash flows in today's dollars by discounting or subtracting the discount rate. If the result or present value of the cash flows is greater than the rate of return from the discount rate, the investment is worth pursuing.

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What is an information system for identifying and planning the enterprise-wide resources needed to take, make, ship, and account for customer orders? part 2 a. eis b. erp c. scm d. mrp

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ERP is an information system for identifying and planning the enterprise-wide resources needed to take, make, ship, and account for customer orders.

About ERP :

An ERP is an application that automates business processes, and provides insights and internal controls, drawing on a central database that collects inputs from departments including accounting, manufacturing, supply chain management, sales, marketing and human resources (HR).

Every business must complete work that requires numerous stakeholders with various responsibilities. But that’s a struggle when the information needed to execute processes and make key decisions is spread across disconnected systems. Whether data is held in basic business management software or spreadsheets, employees have a hard time finding what they need and may lack access to it entirely. For example, the accounting and FP&A teams could each have different spreadsheets with different figures for expense tracking.

EPR Work:

These disparate data sources make it very challenging to keep everyone on the same page and hinders collaboration and efficiency, especially as an organization grows. Staff waste time hunting for documents and potentially duplicating work because there is no one place to look for up-to-date information on all aspects of the business relevant to them. This also makes it difficult to see the full cause and effect of developments affecting your business.

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The chubb roup, an insurance company regularly supplies funds for programming on the public television network. it's donations are an example of:________

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The chubb group, an insurance company regularly supplies funds for programming on the public television network. it's donations are an example of corporate philanthropy.

According to the Council of Foundations, corporate philanthropy refers to those investments and activities which  a company undertakes voluntarily  to  manage and account for its impact on society responsibly .

Philanthropic investments and activities includes the following:

Money

Technical assistance

Donations of products

In-kind services

Other business transactions

Employee volunteerism

The purpose of these investments and activities is to advance a social cause, or the work of a nonprofit organization.

Corporations often feel that it is their social responsibility to give back, and build a positive culture and workplace within their companies. They generally want to show gratitude and give back this to the communities that have helped to make them profitable.

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Large minimum efficient scale of plant combined with limited market demand may lead to?

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A large minimum efficient scale of the plant combined with limited market demand may lead to a natural monopoly. Pure monopolists may obtain economic profits in the long run because: of barriers to entry.

A natural monopoly is a type of monopoly that typically exists because of high initial costs or strong economies of scale of running a business in a particular industry and can pose significant barriers to entry for potential competitors. there is.

A natural monopoly is a monopoly in an industry that has high infrastructure costs or other barriers to entry relative to the size of the market, giving the industry's largest players, often the first players in the market, an overwhelming advantage. give sex. potential competitors

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The par value or stated value of stock represents the amount of legal capital that a corporation must maintain for the protection of the creditors. This statement is.

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The par value or stated value of stock represents the amount of legal capital that a corporation must maintain for the protection of the creditors. This statement is True.

What is stock?A stock, usually referred to as equity, is a type of investment that denotes ownership in a portion of the issuing company. Shares, also known as units of stock, entitle its owners to a share of the company's assets and income in proportion to the number of shares they possess.What do you mean by corporation?A corporation operates, realizes net income or loss, incurs tax obligations, and distributes earnings to shareholders. When a corporation makes a profit, the corporation is taxed; but, when dividends are paid to shareholders, the shareholders are taxed. It results in a double tax.

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A country that has an absolute advantage in producing corn does not necessarily have a comparative advantage in producing corn. True or false?.

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A country that has an absolute advantage in producing corn does not necessarily have a comparative advantage in producing corn -  this statement is true.

What are absolute advantage and comparative advantage?

Comparative advantage is when a country produces a good or service for a lower opportunity cost than other countries. Opportunity cost measures a trade-off. A nation with a comparative advantage makes the trade-off worth it. Absolute advantage, economic concept that is used to refer to a party’s superior production capability. Specifically, it refers to the ability to produce a certain good or service at lower cost. Comparative advantage is concerned with producing at a lower opportunity cost Having absolute advantage doesn’t necessarily mean an economy should produce that good. It is not advisable to try and produce everything.

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A country that has an absolute advantage in producing corn does not necessarily have a comparative advantage in producing corn -  this statement is true.

What are absolute advantages and comparative advantages?

Comparative advantage exists when a country produces a good or service for a more subordinate opportunity cost than other countries. Opportunity cost estimates a trade-off. A nation with a comparative benefit creates the trade-off worth it. Absolute advantage is an economic concept that exists utilized to refer to a party’s superior production capability. Specifically, it directs to the ability to produce a particular good or service at a lower cost.

Comparative advantage exists concerned with producing at a lower opportunity cost Having absolute advantage doesn’t necessarily indicate an economy should produce that good. It is not advisable to try and produce everything. Absolute Advantage: The ability of an actor to produce better of a good or service than a competitor. Comparative Advantage: The capability of an actor to produce a good or service for a lower opportunity cost than a competitor.

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Trans-Pacific Company and USA Export, Inc., form a business organization to engage in importing and exporting. Its assets are held in the names of the members and its shareholders have personal liability. This organization is

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This organization is a joint-stock company.

Option (a) a joint-stock company

Joint-stock businesses are developed to fund as well as pricey ventures for a specific or perhaps a government to fund. It is a service possessed by its capitalists, with each financier maintaining a share based upon the quantity of supply bought.

A joint endeavor (JV) is a service set up in which two or even more parties consent to merge their sources for the function of completing a detailed job.

Business Trust= Real Estate Investment Trusts (REITs) + Infrastructure Investment Trusts (InvITs)

An organization is a short-term partnership of services that collaborates to make massive purchases, which would undoubtedly be challenging to affect separately.

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Your question is incomplete. please read below to find the full content.

Trans-Pacific Company and USA Export, Inc., form a business organization to engage in importing and exporting. Its assets are held in the names of the members and its shareholders have personal liability. This organization is

a joint stock company.

a joint venture.

a business trust.

a syndicate.

According to Lindsey Smith of GE Healthcare, all of the following are necessary for a successful sales career EXCEPT:
a. motivation.
b. compensation.
c. team orientation.
d. integrity.
e. trust.

Answers

According to Lindsey Smith of GE Healthcare, all of the following are necessary for a successful sales career EXCEPT: compensation.

Act or condition of compensation. B. By compensating a person for loss, damage, or injury by rewarding the person for services or by providing a reasonable benefit to the injured party. The state of being so compensated or rewarded.

Rewards can also be used as rewards for good performance. Examples of such plans are bonuses, commissions, shares, profit sharing, and profit sharing. The goal of compensation is to attract those who work for the organization and to retain those who are already working for the organization. Rewards are also used to motivate employees to perform at their best and improve morale.

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Jeremy wants to avoid conflict with his new coworkers. he should ______. a. spread gossip with them b. treat them all with respect c. talk to the most popular people d. buy them expensive gifts please select the best answer from the choices provided a b c d

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Jeremy wants to avoid conflict with his new coworkers. He should treat them all with respect.

Option B is correct answer.

Conflict in workplace :

Conflict is a difference or disagreement between two or more people. Conflict in the workplace is a normal part of human interaction, yet, handling and resolving conflicts that arise is probably one of the biggest challenges employees face.

What is good conflict in the workplace?

Positive conflict is constructive in nature. It produces new ideas, solves continuous problems, provides an opportunity for people and teams to expand their skills, and fosters creativity. When opposing ideas are explored, a breakthrough of thinking can occur.

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The chances of a risk event occurring as a project proceeds through its life cycle tend to?.

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The correct answer is Slowly dropped.

What is the life cycle of the risk management process?The risk management process, which consists of these five fundamental components, is used to manage risk. Starting with risk identification, it moves on to risk analysis, prioritization, solution implementation, and risk monitoring.Operational risk is the danger of suffering losses as a result of poor or ineffective procedures, rules, plans, or circumstances that interfere with business operations.Risk is the stage where loss or harm occurs due to a lack of correct information, expertise, or experience. This stage can be controlled by using proper Risk management approaches throughout the project life cycle.

The chances of a risk event occurring as a project proceeds through its life cycle tend to:

The correct answer is Slowly dropped.

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The brinton clothing company wants to create and build brand awareness. It would use ________ advertising.

Answers

Answer:

Informative

Explanation:

It would use informative advertising

The Brinton clothing company wants to create and build brand awareness. It would use Informative advertising.

What is a brand?

"A brand can be described as a comprehensive marketing strategy that is used to demand the company's product or one of the product's many lines. It basically functions as a signal that the client can use too."

The Brinton apparel company seeks to establish and grow brand recognition. This would be related to the brand it is necessary for a person to get any kind of information from the data.

If the data is being taken up then it needs to be full and informative so that people would know and understand what the product is. This will help the print and clothing company to establish its brand and value. So that people may be able to buy their product.

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If the price elasticity of demand for a good is 2.0, then a 10 percent increase in price results in a?

Answers

Answer:

if the price elasticity of demand for a good is 2.0 then a 10 percent increase in price results in a 20 percent decrease in the quantity demanded.

Sally, a licensee, has been asked to be the sales agent for a company selling new mobile homes. can she sell these new mobile homes? if not, what sort of mobile homes can she sell?

Answers

Sally may not sell new mobile homes, but she may sell used mobile homes, if they have been registered with the State of California and are on lot. She would have to become licensed by the California Department of Housing and Community Development to sell new mobile homes.

A mobile home is prefabricated building that is constructed in a factory and then moved to its destination on a chassis that is permanently fastened. They are frequently left continuously or semi-permanently in one area but can be moved and may occasionally be obliged to move or registered  the legal reasons.

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The first three steps of the strategic management process involve ________ strategies

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The first three steps of the strategic management process involve planning, execution and monitoring of strategies.

Successful strategic management involves three steps namely planning, execution and monitoring of the developments & progress.

With  the  help of strategic management, actions speak  more louder than the  words. Effective strategic planning that yields the appropriate decisions which can come up even  short on delivering performance improvements.

Strategic Management is a more powerful means of optimizing the long-term performance of an organization. The last key to success is repetition of the process of strategic management again and again.

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When developing cash flows for capital budgeting, it is easy to overlook important items.

a. True
b. False

Answers

When developing cash flows for capital budgeting, it is easy to overlook important items. The given statement is true.

The procedure a company uses to assess potential big projects or investments is called capital budgeting. Before a project is accepted or denied, capital budgeting is necessary. Examples of such projects include the construction of a new plant or a significant investment in a third party enterprise.

The decision-making process related to investing in long-term projects is referred to as capital budgeting. One example of this is the capital budgeting process carried out by an organization to determine whether to keep using the current machinery or purchase new machinery to replace the old machinery.

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When marketers carefully develop a set of product attributes such as the brand name, features/design, and quality level of an offering, they are developing the.

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When marketers carefully develop a set of product attributes such as the brand name, features/design, and quality level of an offering, they are developing the -- actual product

Defining Product :

A product is a bundle of attributes (features, functions, benefits, and uses) that a person receives in an exchange. In essence, the term “product” refers to anything offered by a firm to provide customer satisfaction, tangible or intangible. Thus, a product may be an idea (recycling), a physical good (a pair of sneakers), a service (banking), or any combination of the three.

Brand :

Brands are interesting, powerful concoctions of the marketplace that create tremendous value for organizations and for individuals.

Defining actual product :

An actual product is what the consumer holds in his or her hand when the product is purchased. This is the packaging, brand name, logo and all tangible aspects of the product that can be seen without opening or using the product. While the tangible aspects of the product may not help the quality, it can lead to increased sales if properly used.

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An effective team would never have ______. a. multiple long term goals b. a series of coordinated deadlines c. unclear definitions of goals d. goals which mesh with the company culture please select the best answer from the choices provided a b c d

Answers

An effective team would never have Unclear definitions of goals.

Option C is correct answer.

Unclear definitions of goals :

Unclear goals are part of the communication problem that continues to plague many workplaces, and were also cited as the number one cause of stress for tech workers in an earlier Comparably study. Employees who don't know what's expected of them can't perform their best work.

What happens when goals are unclear?

A lack of direction and unclear goals are among the largest reasons why projects fail. While it may be impossible to predict every outcome, taking time early on to define and communicate objectives and goals can radically increase the chance your team successfully completes a project.

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An uncertain future event affecting the consequence associated with a decision is known as a?

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An uncertain future event affecting the consequence associated with a decision is known as a chance event.

Because it result obtained when a decision alternative is chosen and a chance event occurs. A measure of the consequence is often called a payoff. states of nature. the possible outcomes for chance events that affect the payoff associated with a decision alternative.

Event is a collection of outcomes of a trial of a random experiment.

consequence is Something that logically or naturally follows from an action or condition.

outcomes is something that happens as a result of an activity or process result.

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During a meeting, brock pulls out his cell phone to check emails because the cfo's presentation is boring and uninteresting. which principle of listening is ignored in this example?

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The principle of listening which is ignored here is that, listening is the responsibility of both the speaker and the receiver.

Research has found that by listening effectively you will get more information from the people you manage, you will also increase others trust in you, you will reduce conflict, and you will better understand how to motivate others.

Listening skills are so important for the both the speaker and the receiver because they enable both parties to have good communication. Thus, individuals should practice good communication in order to ensure that there is no concerns or differences between both parties.

Hence, listening is the responsibility of both the speaker and the receiver.

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Can anybody choose the correct answers pls...​

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Economics is an inquiry into the nature and causes of The Wealth of Nations. (Option C).

Who made the above statement?

Scottish-born Adam Smith, a philosopher and economic theorist, was born in 1723.

He is most known for his revolutionary work on economics, "An Inquiry into the Nature and Causes of the Wealth of Nations," published in 1776.

What would happen if the market for goods are located far  form the factory that you have established?

The above scenario would translate into added costs which may lead to a loss. The additional cost will come from transporting goods to a far market. Hence the correct answer is option C.

Two type of related commodities are:

Supplementary and complementary goods (Option D).

Two things are considered supplementary or complementary when they are utilized in tandem. For instance, if you own a car, you also need gas to power it.

A supplemental item if you own a television would be an Amazon widget, which gives you access to a far wider selection of television shows.

Which of the following conditions implies extension of supply?

The condition where there is higher price, leading to higher supply meets the above criteria. Hence the correct answer, which corresponds with the law of supply, is Option D.

What is Tertiary Sector economic activity?

The tertiary sector encompasses a wide range of activities, including commercial and personal services, education, health care, social work, transportation, financial and real estate operations, and administration.

Hence the correct answer is (option A)

Car and Petrol are examples of?

The above are examples of complementary goods (Option A). This is because, you need petrol to be able to run a car.

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Ella co. owns a mineral deposit and recognizes $15,000 of depletion expense during the period. this entry will be recorded with a credit to:

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This entry will be recorded with a credit to Accumulated Depletion.

What is Accumulated Depletion?

Accumulated depletion exists as the amount of depletion expense that includes built-up throughout the usage of a natural resource. This amount exists paired with the natural resource asset on the balance sheet as a contra account. Accumulated depreciation includes a credit balance because it aggregates the amount of depreciation expense assessed against a fixed asset. This account exists paired with the fixed assets line item on the balance sheet so that the integrated total of the two accounts reveals the remaining book value of the fixed assets.

Depreciation lives the periodic change of the capitalized cost of a tangible fixed asset over its calculated useful life. Depletion stands for the allocation of the total cost of formulating natural resources for exploitation over their usable life. This entry will be recorded with a credit to Accumulated Depletion.

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The united states and kenya are exploring the possibility of a trade deal. ________ refers to a situation in which a government does not attempt to restrict what its citizens can buy from or sell to another country.

Answers

The united states and kenya are exploring the possibility of a trade deal. Free Trade refers to a situation in which a government does not attempt to restrict what its citizens can buy from or sell to another country.

What is Free Trade?

A free trade policy is one in which imports and exports are not restricted. It is also known as the free market concept applied to international trade. Most countries now participate in multilateral trade agreements negotiated by the World Trade Organization. Goods and services can be purchased and sold across international borders with little or no government taxes, quotas, subsidies, or bans impeding their interchange under a free trade policy. Trade protectionism and economic isolationism are the polar opposites of free trade.

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If the u.s. dollar depreciates in the foreign exchange market, american exports will _____ and american imports will _____.

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If the u.s. dollar depreciates in the foreign exchange market, american exports will Increase and american imports will decrease.

What do you mean by foreign exchange market?

The over-the-counter (OTC) foreign exchange market is where exchange rates for different currencies are decided. With a global network of financial centers operating around the clock, it is by far the biggest financial market in the world and only closes on the weekends.

A global decentralized or over-the-counter market for trading currencies is known as the foreign exchange market. For every currency, exchange rates are set by this market. It covers all facets of purchasing, selling, and exchanging currencies at established or current rates.

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An HR team is meeting to discuss ways to improve the validity of its performance management system. One member suggests adding customer evaluations of the sales representatives in order to gauge their impact on customer satisfaction and sales. What is the major challenge of this approach

Answers

Answer: customer evaluations could cost hundreds of dollars for each survey.

Explanation:

During the current year, merchandise is sold for $50,900 cash and for $80,700 on account. the cost of the goods sold is $85,540. What is the amount of the gross profit?

Answers

Amount of gross profit is $46,060.

Gross profit = Sale value - cost of the goods sold

                    =  ($50,900 +  $80,700) - $85,540

                    =  $46,060.

Gross profit is the amount of money a company keeps after deducting all of the expenses incurred in producing and offering its goods or services. By subtracting the cost of goods sold (COGS) from your total sales, you may determine gross profit. The value is the lowest price the company would receive if it sold all of its assets in an auction. All  the products sold by the business are included in the overall sales.

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Who will be taxed for eskom

Answers

Answer:

the lion

Explanation:

because the lion has a tail

Macro events only are reflected in the performance of the market portfolio because_________.

Answers

Macro events only are reflected in the performance of the market portfolio because the specific risks have been diversified away.

A market portfolio is a theoretical bundle of investments that consists of each kind of asset to be had within the investment universe, with each asset weighted in proportion to its total presence in the market. The predicted return of a market portfolio is equal to the expected go back of the market as a whole.

The market portfolio is a basket of assets created by an investor the use of varied set of investments. The basket can encompass securities like pension plans, mutual funds, shares, actual property, bonds, foreign currencies, and assets like silver, gold, coins, bitcoins to call some.

The basic expected return method includes multiplying every asset's weight in the portfolio via its anticipated return, then including all the ones figures together. In different words, a portfolio's anticipated return is the weighted average of its personal components' returns.

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How much money is made every year in the u.s. from merchandise tie-ins to movies and tv shows?

Answers

-studios find that spending more on films that have high merchandising appeal is less risky than producing low-budget films with no such appeal
-studios make decisions about which films to develop based on merchandise tie-in appeal

With regard to researching and writing a paper with proper citations which behavior is least risky?

Answers

With regard to researching and writing a paper with proper citations the behavior which is least risky is assuming that you need to memorize citation formats.

A research paper refers to an essay in which you explain what you have learned after exploring your topic in depth. The main goal of a researching is to bring together different views, evidence, and facts about a topic

While performing a research, a researcher uses citations formats in his research paper. The citation format which is used in this research paper is the APA Style, which is used in the social and behavioral sciences, and considered the most popular citation style.

Hence, in research paper, the behavior which is least risky is assuming that you need to memorize citation formats. As, the memorizing citations formats is unnecessary.

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To accomplish u. s. objectives, the national security strategy guides the coordination of the instruments of national power which include:_____.

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To accomplish u. s. objectives, the national security strategy guides the coordination of the instruments of national power which include the military, economics, information and diplomacy

According to Section 603 of the Goldwater-Nichols Department of Defense Reorganization Act of 1986, the National Security Strategy (NSS) is a report that must be produced (Public Law 99-433). Since 1987, the NSS has been distributed yearly, but frequently, reports are received late or not at all.

The National Security Strategy discusses potential applications for all dimensions of American power that are required to meet the country's security objectives. The discussion of American international interests, commitments, goals, and policies is required in the report, along with information on the military capabilities required to thwart threats and carry out American security plans.

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