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The United States has experienced continuous current account deficits as the early 1980s. What do you think are the major causes for the deficits? What would be the results of continuous U.S. current account deficits?The current account deficits of U.S. might comprise reflected a few reasons like (I) a historically high real interest rate in the U.S., which is because of ballooning federal budget deficits, that kept the dollar strong, and (ii) weak competitiveness of the U.S. industries.
Internal business risk associated with the operational efficiency of the firm. The operational efficiency differs from company to company. The efficiency of operation is reflected
Q. Miller Approach of irrelevance of dividends? Discuss the Modigliani as well as Miller Approach of irrelevance of dividends. What are its drawbacks? Ans. Modigliani with M
Steps involved in the Process of Securitization The following are the major steps involved: The lender (also called the originator) - in th
Question: You have just been appointed the secretary of the ALM Committee (ALCO) of ABN Bank. The ALCO members have some queries relating to the liquidity risk faced by the ban
Talbot Enterprises recently reported an EBITDA of $8 million and net income of $2.4 million. It had $2.0 million of interest expense, and its corporate tax rate was 40%. What was i
What are compensating balances and why do banks require them from some customers? Under what circumstances would banks be most likely to impose compensating balances? Compensati
What are the different types of cash flow to the bondholder of coupon bonds? Coupon bonds deliver two different kinds of cash flow to the bondholder are as follows: a. Face
Why does a tax create a deadweight loss? What determines the size of this loss? A tax makes deadweight loss by artificially increasing price above the free market level, so de
Payback Period It is an amount of time, mainly measured in years; it takes previously the undiscounted cash inflows from a project equal the cash outflow. It indicates the leng
Following are the areas an analyst should consider while assessing the creditworthiness of an issuer. 1. Security Limitations: The bond indenture shoul
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