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ioda
4 years ago
10

Bruce & Co. expects its EBIT to be $100,000 every year forever. The firm can borrow at 11 percent. Bruce currently has no de

bt, and its cost of equity is 18 percent. The tax rate is 31 percent. Bruce will borrow $61,000 and use the proceeds to repurchase shares, which is referred to as the recapitalization. What will the debt-to-equity ratio be after the recapitalization? Multiple Choice 0.00 percent 15.16 percent 17.88 percent 84.84 percent 100.00 percent
Business
1 answer:
zhenek [66]4 years ago
3 0

Answer:

15.16 percent

Explanation:

Debt Equity ratio measures the ratio of the debt to its equity.

Formula for debt equity ratio is as follow

Debt / Equity ratio = Debt of the company/ Equity of the company

As per given data

Equity = $383,333.33 + 0.31($61,000) = $402,243

Debt = $61,000

Placing values in the formula

Debt / Equity ratio = $61,000 / $402,243

Debt / Equity ratio = 15.16%

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<span>Right of association-Gradpoint</span>
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3 years ago
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All of the following are characteristics of Weberian bureaucracy except:
azamat

Answer:

b. management is the same as the ownership of the organization.

Explanation:

Weberian bureaucracy is the term used for the bureaucracy concept introduced by Max Weber, the famous sociologist and economists. He clearly stated that for any kind of administration the basic need is to maintain some standard characteristics:

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Therefore, the correct option is:

b. management is the same as the ownership of the organization.

6 0
3 years ago
On December 31, 2017, Stellar Company had $1,159,000 of short-term debt in the form of notes payable due February 2, 2018. On Ja
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Answer:

Explanation:

Before showing how short term debt should be presented before doing this we have to classify the items in each head

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5 0
3 years ago
When mik has an absolute advantage in the production of two goods over tommy, mik?
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6 0
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The amount of the average investment for a proposed investment of $191,000 in a fixed asset with a useful life of 4 years, strai
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Straight line depreciation = Annual depreciation / (purchase price -salvage value)
The steps in calculating a straight line depreciation are:
Find out how much the asset costs.
To determine the entire depreciable amount, deduct the asset's estimated salvage value from the asset's purchase price.
Find out how long the item will be useful.
To calculate the annual depreciation amount, multiply the total from steps (2) and (3) by the figure determined in steps (3).
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6 0
2 years ago
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