New regulations make it easier for shareholders to replace company directors. If this event occurred, the volume of bank loans would increase. This would occur because consumers would feel more trust in banking and in loans and there would be more accountability to these investors.
A new law makes it a felony to default on a bank loan.If this event occurred, the volume of bank loans would decrease. This would occur because there is much higher risk for those taking out loans. Not only is there interest, but they may also be punished for committing a felony.
All the economy’s small firms are bought by large firms. If this event occurred, the volume of bank loans would decrease. This would occur because large firms tend to have a bond …show more content…
When this list of reasons for bank consolidation is examined, it is clear that certain motives are beneficial to the stockholders of Melvin’s Bank whereas other motives are not beneficial to the stockholders of Melvin’s Bank. It should be noted that there is often overlap between reasons that a company may go through with acquisitions. This means that the exact outcome for the shareholders is highly situational and is multidimensional.
A. In a scenario where the government guarantees the firms’ bonds (i.e, it makes the promised payment if either firms sell bonds), it must promise several payments. First, it must promise the payment even if the firms fail; this must be promised because otherwise there is no investor confidence.
B. Assuming it does so for each firm, the average cost to the government for guaranteeing a bond is different. For the safe firm, the cost is $0 dollars because the safe firm never defaults. For the risky firm, the cost is that one third of the time, the government must pay $110 to bondholders. This is the value for the risky firm because this firm may default one third of the …show more content…
Restrictions exist on payday lending within the state of Indiana. One restriction on payday lending is that the Maximum Loan Amount is $550 and is not to exceed 20% of the borrower’s monthly gross income. The loan term minimum is 14 days. Another restriction on payday lending is that there are maximum finance rates and fees. There are also restrictions on the maximum number of outstanding loans at one time and on repayment periods. finally, there are limitations on collection. There are other restrictions that are not listed here. Relative to other states, these restrictions are relatively thorough.
One commercial bank near me is Wells Fargo. The current interest rates on 1-year certificates of deposit is 0.05% APY at this bank. One credit union near me is the Indiana Members Credit Union. The current interest rates on 1-year certificates of deposit at this credit union is 0.75% APY. In this scenario, it is clear that this is a substantial difference. In fact, the credit union’s APY is 1500% of the APY for the bank’s offer for the one-year-long certificate of deposit.
The current interest rates on 1-year certificates of deposit at the credit union are substantially higher than those at the bank, Wells Fargo. The difference in the interest rate between these two organizations can likely be explained by the fact that by getting a CD at a credit union, you are considered to be earning dividends instead of earning interest,