Answer:
1.46
Explanation:
Given that,
Total Assets value = $12 billion
Tax rate = 25%
Basic earning power (BEP) ratio = 18%
Return on assets (ROA) = 4.25%
Net Earnings:
= Return on assets × Total Assets value
= 4.25% × $12 billion
= $0.51 billion
BEP = EBIT ÷ Total Assets
EBIT = 18% × $12
= $2.16 billion
Earnings before tax = Net income ÷ (1 - tax)
= $0.51 ÷ (1 - 25% )
= $0.68 billion
Interest Expense = EBIT - EBT
= $2.16 - $0.68
= $1.48 billion
Times-interest-earned (TIE) ratio:
= EBIT ÷ Interest expense
= $2.16 ÷ $1.48
= 1.46
Answer:
B. Stock analysts can use fundamental analysis to identify undervalued stocks.
Answer:
Beta = 1.46
Explanation:
Firstly, we need to calculate covariance of S&P 500 return and Well Fargo stock return, using below formula:
Correlation coefficient between Wells Fargo stock return and the S&P 500 Index return = Covariance of S&P 500 return and Well Fargo stock return/(Standard deviation of S&P 500 return x Standard deviation of Well Fargo stock return), or
0.82 = Covariance of S&P 500 return and Well Fargo stock return/(0.237 x 0.423). Solve the equation we get Covariance of S&P 500 return and Well Fargo stock return = 0.082.
Secondly, we calculate beta of S&P 500 return and Well Fargo stock return, using below formula:
Beta = Covariance of S&P 500 return and Well Fargo stock return/Variance of S&P 500 return
= 0.082/(0.237)^2 = 1.46
Answer:
Early precautionary measures of trouble ahead can not be issued.
Explanation:
Since a strategic strategy maps out a path for the organisation to follow, it will enable it tighten its attention in order to get somewhere. Therefore, strategic preparation will help the organisation create the best priorities and strategies and help others concentrate their energies on achieving them.
