Answer:
4.71
Explanation:
Cash coverage is a financial tool to calculate the proportion of available cash to interest expenses. It is useful in that it gives a deeper insight into available cash to offset interest expense and guide towards proper investment of cash.
<u>Workings</u>
Cash coverage ratio = cash + cash equivalent / interest expenses.
To arrive at the cash equivalent , depreciation is added back to the net income
Cash equivalent = 15,585+ 2,525 = 18,110
Interest expenses = 3,846
Cash coverage ratio = 18,110 / 3,846 = 4.71
This seems high and it is advisable that cash should be used for some short term investments to earn other profit
Answer:
r - 2%
Explanation:
Nominal Interest rate = real interest rate plus expected inflation rate
that is,
Nominal Interest rate = real interest rate + expected inflation rate
let the real interest rate be r
since inflation is reduced, expected inflation rate is in the negative that is - 2%
therefore,
Nominal Interest rate = r + (- 2%)
= r - 2%
Answer:
Explanation:
the file attached shows the whole solution
It is the improvement of Superior Process Technology. The hypothesis is that in the cutting edge world, rather than other assembling enterprises, an organization's net revenue frequently increments with each extra client. Expanding return financial matters guarantees that as a result of a putative size preferred standpoint, the early market pioneer will have the capacity to pound late landings by cutting costs.
Answer: The constant growth model can be used if a stock's expected constant growth rate is less than its required return.
Explanation:
The Constant Growth Model is a stock valuation method.
It assumes that a company's dividends are increasing at a constant growth rate indefinitely.
Formula: Current price = (Next dividend the company is to pay) ÷ (required rate of return for the company - expected growth rate in the dividend.
When expected constant < required return, then the constant growth model can be used.
Hence, the statement is true about the constant growth model :
The constant growth model can be used if a stock's expected constant growth rate is less than its required return.
