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Author Question: Equity finance is represented by which of the following? A) when a firm borrows money from banks ... (Read 53 times)

cagreen833

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on: Jun 30, 2018
Equity finance is represented by which of the following?
 
  A) when a firm borrows money from banks
  B) when a firm sells bonds
  C) when a firm sells shares of stock
  D) when a firm draws down retained earnings
  E) when a firm sells off part of its capital stock

Question 2

The demand for money is given by Md = Y (0.3 - i), where Y = 100 and the supply of money is 20. a. What is the equilibrium interest rate? b. What is the impact on the interest rate if central bank money is increased to 25?
 
  What will be an ideal response?


Brenm

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Reply #1 on: Jun 30, 2018
Answer to Question 1

C

Answer to Question 2

a. i = 10
b. Interest rate will decrease to 5.


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