Answer:
a. What is the value today of Steinberg's debt and equity?
b. What is the value today of Dietrich's debt and equity?
c. Steinberg’s CEO recently stated that Steinberg’s value should be higher than Dietrich’s because the company has less debt and therefore less bankruptcy risk. Do you agree or disagree with this statement?
- A. Disagree: a company's value is determined by by its operating income (EBIT), not by there capital structure (M&M theory).
Explanation:
economic expansion 80% chance, EBIT $3.5 million
economic recession 20% chance, EBIT $1.9 million
expected EBIT = (3.5 x 0.8) + (1.9 x 0.2) = $2.8 million + $0.38 million = $3.18 million
Steinberg's debt obligations $980,000 at the end of next year
Dietrich's debt obligations $2,000,000 at the end of next year
total company value = $3.18 million / (1 + 10%) = $2,890,909
An import quota is a type of trade restriction that sets a physical limit on the quantity of a product that can be imported into the country in a set period of time.
<u>Explanation:</u>
A quota is a government-imposed trade constraint that restricts the number or commercial value of goods that a country can ship or export throughout a distinct period. Countries adopt quotas in international trade to assist improve the volume of trade among them and other countries.
Extremely restrictive quotas linked with high tariffs can begin to trade conflicts and other obstacles within nations. If the amount imported beneath a quota is less than would be shipped in the inadequacy of a quota, the domestic price of the commodity in problem may rise.
Answer:
A
Explanation:
Technological innovations are been increasingly adopted in schools.
examples of technological innovations used in schools are :
- Digital readers and tablets.
-
Virtual reality
- Gamification
- Use of Biometrics
- Cloud technology
- Artificial intelligence
- Mobile technology
Advantages of adopting technology in schools include :
- It facilitates the learning process and ensures faster retention of what is taught
- It also helps students remember what they were been taught in schools. for example, there are educational game apps
- Also, students can get help faster with questions they might have. for example, an app like brainly provides answers and explanation to students
- With technology, learning can take place outside the four walls of a school. With the pandemic, technology has facilitated learning from home.
Services are very difficult to evaluate. <span />
Answer:
The statement is false
Explanation:
S corporations are pass through corporations, which means income earned is passed to the owners and they are taxed at individual level.
Shareholders of S corporation earns income in the form of wages and distributions. Wages are charged with payroll taxes. S corporation shareholders are not subject to self-employment taxes which is an advantage for them.
Therefore, the statement is false
