1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
amid [387]
3 years ago
14

The major contribution of the Miller model is that it demonstrates that a. financial distress and agency costs reduce the value

of using corporate debt. b. personal taxes increase the value of using corporate debt. c. equity costs increase with financial leverage. d. personal taxes decrease the value of using corporate debt. e. debt costs increase with financial leverage.
Business
1 answer:
klemol [59]3 years ago
8 0

Answer:

b. personal taxes increase the value of using corporate debt.

Explanation:

Since the interest on debt funding is excluded from corporate tax, the leverage may have a beneficial impact in increasing the valuation of a company. The value of the leveraged firm will also rise due to debt as compared with the value of the unlevered firm, since the unlevered firm does not benefit from the benefits of tax savings. When the debt increases, leverage gains increasing.

Hence, the correct option is b.

You might be interested in
A Nike Hoodie has a retail price of $99.00 and it costs the retailer $49.50. What is the mark-up
guajiro [1.7K]

Answer:

100%

Explanation:

Mark-up is the difference between selling price and cost price

Selling price =$99.00

Cost price = $49.50

Mark up = $99- 49.50

=$49.50

As a percentage

= $49.50/$49.50 x 100

= 1 x 100

= 100%

6 0
3 years ago
What accounts for the increase in operating support when an independent business expands by becoming a franchisor?
Musya8 [376]

Answer:

hi

Explanation:

I don't know

sorry sorry sorry

3 0
2 years ago
Use the following data to determine the total dollar amount of assets to be classified as current assets
borishaifa [10]

Answer:

the total dollar amount of assets to be classified as current assets is $220,000.

Note that the correct option is $220,000 based on the information provided in the question. However, this is not included in the option. Kindly confirm the correct options from your teacher.

Explanation:

Current assets can be described as a group of assets that are can be easily converted to cash within a year. Current assets are therefore assets which are expected to be used, sold or consumed in a normal business operations within a financial year.

Current assets is one of th component of a balance sheet and its components include cash, inventories, account receivables, advance payment (prepayments), and others.

For this question, the total dollar amount of assets to be classified as current assets can be determined as follows:

                  Carne Auto Supplies

    Current Assets Amount Determination

                  December 31, 2012

<u>Particulars                                      Amount ($)</u>

Cash                                                   60,000  

Prepaid Insurance                             40,000  

Accounts Receivable                        50,000  

Inventory                                           <u> 70,000  </u>

Total current assets                      <u> 220,000   </u>

Therefore, the total dollar amount of assets to be classified as current assets is $220,000.

6 0
3 years ago
Poe Company is considering the purchase of new equipment costing $80,000. The projected net cash flows are $35,000 for the first
sergey [27]

Answer:

$23,773.65

Explanation:

Net present value is the present value of after tax cash flows from an investment less the amount invested

NPV can be calculated using a financial calculator :

cash flow in year 0 = $-80,000.

Cash flow in year 1 and 2 = $35,000.

Cash flow in year 3 and 4 = $30,000.

I = 10%

NPV = $23,773.65

To find the NPV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.  

3. Press compute  

5 0
3 years ago
Is defined as information containing? patterns, relationships, and trends of various forms of data?
DerKrebs [107]
Business Intelligence. Business intelligence is a broad term that covers basically any information in any format that may be relevant to business strategies. This can include, transaction info, product info, trends, app statistics and so much more. 
4 0
3 years ago
Other questions:
  • Free rein leaders can be described as:
    5·1 answer
  • g You borrow $10,000 from your bank to buy a new car. If the loan is for four years at 7% annual interest and payments are made
    6·1 answer
  • According to one study, the price elasticity of demand for restaurant meals is 2.27. This implies that if restaurants want to in
    13·1 answer
  • What is the policy used most by the Fed to change the money supply?
    14·1 answer
  • At the end of the current period, Maltese, Inc. reports the following amounts: Assets = $52,300; Liabilities = $21,100; Dividend
    9·1 answer
  • Treasury bonds have what maturity date?
    5·2 answers
  • An intelligence system that helps managers assess their competition and vendors in order to become more efficient and effective
    9·1 answer
  • The Balance Sheet for Renuvation LLC shows assets totaling $107,000 and liabilities totaling $75,000. Which of the following sta
    14·1 answer
  • Clarisa, an engineering manager, wants to purchase a resort accommodation to rent to skiers. She is considering the purchase of
    10·1 answer
  • Slippery Slopes promised to arrange for a licensed California contractor to "work with" Water Slides Designs on the construction
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!