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
ANTONII [103]
3 years ago
6

Other things held constant, an increase in financial leverage will decrease a for-profit business’s market risk as measured by i

ts beta coefficient.
True or False?
Business
1 answer:
vaieri [72.5K]3 years ago
8 0

Answer:

False because if the financial leverage is growing then the Financial risk will start growing and this increase in the financial risk will increase the beta. Furthermore this increase in financial leverage is also responsible for the increase in the Bankruptcy Risk.

Remember the beta factor is directly proportional to market risk (Systematic Risk) this means if the market risk is increasing then the beta will also increase and if the market risk is decreasing then the beta is decreasing. This is evident from the fact that people require more returns from their investments in Asia than USA. The reason is that the Market risk in Asian countries is more than United states of America.

You might be interested in
Prahm Corp. wants to raise $4.4 million via a rights offering. The company currently has 500,000 shares of common stock outstand
Pavel [41]

Answer:

price for selling 3000 share right is $25060.87

Explanation:

Given data:

Total Amount raised=   $4,400,000  

Spreading rate = 6%

Subscription price =   $20 per share

Number of share owned by company = 500,000

Per share cost  = $45

Totals share own in the company = 3000

subscription price after deducting spreading rate = 20\times (1 -0.06) = $18.80

Now, Right share = \frac{4400000}{18.8} = 234,043

Right price is calculated as

Right price = ((Number of share held * market price) + (Right share *Right price))/( Number of share held + Right share)

plugging all value in above relation

                 = \frac{500000 \times 45 + 234043\times 18.8}{500000 + 234043}

Right share = $36.65

single right value = 45- 36.65 = $8.35

Price for 3000 share right = 8.35 *3000 = $25060.86

6 0
4 years ago
What is a niche market?
valina [46]

A niche market is the subset of the market on which a specific product is focused. The market niche defines the product features aimed at satisfying specific market needs, as well as the price range, production quality and the demographics that it is intended to target. It is also a small market segment.

5 0
4 years ago
Read 2 more answers
Dave works as a traveling pharmacist. He does not work at one pharmacy but fills in all over the country whenever another pharma
Anon25 [30]

Answer: This is an example of a RPh on the Go.

Explanation: RPh on the Go is a national health protection services company placing druggist and apothecary technicians into apothecary careers crosswise the country.

3 0
3 years ago
A not-for-profit voluntary health and welfare organization should report a contribution for the construction of a new building a
Brilliant_brown [7]

Answer:

The correct answer is letter "C": financing activities.

Explanation:

Cash flow refers to transferring cash to, or from, an account, a company, or an investment. In the cash flow statement, there is a section called "<em>Financing Activities</em>" where all the net flow of cash to fund the entity is recorded. Those activities imply the <em>firm's equity, debt, </em>and <em>dividends</em>.

7 0
3 years ago
Some people believe that the right of privacy should be extended to the workplace. Others feel that, on the contrary, such an ex
PSYCHO15rus [73]

Explanation:

This discussion about organizations monitoring employee behavior can be related to ethical and unethical issues.

The ideal is for the company to have a set of well-defined policies and procedures with regard to the rights and duties of employees, as long as the policies have ethical and legal foundations, which guarantee the right to privacy and human integrity.

Therefore, the monitoring of the employee's behavior must always be related to their functions, and to the fulfillment of internal policies.

6 0
3 years ago
Other questions:
  • What aspects of managing your account were probably more difficult before online banking was available?
    7·1 answer
  • Suppose the Fed carries out an open market sale of $100m and simultaneously decreases the minimum required reserve ratio from 10
    11·1 answer
  • A narrative report is a type of inspection report that's
    15·1 answer
  • While driving to school, Brandon thinks about his upcoming midterms. When he reaches campus, he realizes that he doesn't remembe
    10·1 answer
  • $1,621,000 and will produce $307,000 per year in years 5 through 15 and $570,000 per year in years 16 through 25. The U.S. gold
    8·1 answer
  • Money is: the gold and silver behind the currency and the coins that are issued by the government. only the printed paper curren
    15·1 answer
  • ASC 480-10 provides guidance on determining whether (1) certain financial instruments with both debt-like and equity-like charac
    9·1 answer
  • Which accurately describes the terms of this mortgage? Check all that apply.
    8·1 answer
  • One of the core skills needed for the following position in a museum involves researching the artifacts and works on display.
    9·1 answer
  • The three steps in the financial planning process are to forecast the firm's short- and long-term needs, develop budgets, and __
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!