When using the free-cash flow model, cash flows are discounted at the weighted average cost of capital (WACC) and when using the dividend discount model, dividends are discounted at….
Choose one of the discussion questions below to focus on for your discussion contribution.
Once you have completed your initial post (2-3 paragraphs), read and respond to the posts of at least 2 of your peers.
Your initial post and your peer responses should be substantial and original. Clearly cite any outside sources incorporated in to your original thoughts using MLA. For questions, reference the MLA guidelines.
Suppose that in year 2025, the US economy enters once of its worst recessionary gaps in history. Address these two related questions below:
Compare and contrasts how fiscal policy and monetary policy could be used to help address this economic downturn. Explain.
The US government is currently trillions of dollars in debt. If economists view reducing this debt to be critically important, do you think fiscal or monetary policy is a better response to the economic downturn? Explain.
You are considering buying a house by borrowing money from a bank. Of course, you would prefer that interest rates would be low when you borrow money. Address the three related questions below:
If you expect the Fed to raise the discount rate in the near future, would you be better to borrow money now or wait? Explain.
If you expect the Fed to raise the required reserve rate in the near future, would you be better to borrow money now or wait? Explain.
If you expect the Fed to engage in open market purchases (e.g. buying government bonds) in the near future, would you be better to borrow money now or wait? Explain.