An annual rate of return is the amount of loss or gain made through an investment in a yaear based on the percentage of intial investment.
In this case, since the quarterly divident is $1, in one year it would be:
$1 x 4 = $4
So, the annual rate of return would be $4 / $80 x 100% = 2%
Answer:
2009 $11,000
2010 $19,250
Explanation:
Calculation to determine what Depreciation expense in 2009 and 2010 will be:
2009 depreciation expense=$88,000 × 2/8
2009 depreciation expense = $22,000/2
2009 depreciation expense = $11,000
2010 depreciation expense= $77,000 × 2/8 2010 depreciation expense=$19,250
Therefore the Depreciation expense in 2009 and 2010 will be:
2009 $11,000
2010 $19,250
Answer:
True
Explanation:
Modigliani and Miller or MM hypothesis states that dividend policy of a firm plays no role in the determination of the market value of it's stock or the market value of the firm.
As per the theory, dividend policy of a firm is irrelevant and does not affect the value of the firm.
The theory maintains that under specific set of assumptions, the capital structure of a firm and it's composition does not play any role in determining the value of a firm and no capital structure can be termed as optimal.
It further states, the value of a firm is determined by capitalizing it's expected return with the firm's average cost of capital. Also, a firm cannot change the total value of it's securities by splitting it's cash flows into different streams such as dividends or retained earnings.
A firm's value is determined by a firm's real assets and not by it's issued securities.
Answer: Lower interest rate are better. Higher interest rate is worse
Explanation:
A lower interest rate is better when borrowing money through credit cards or loans. You will be paying less. High interest rates are only good when you are the lender.
Answer:
a. 1.79
b. 0.78
c. 0.30
d. 0.43
Explanation:
a. The Current Ratio checks if the company can cover it's current Liabilities with it's current assets. The formula is;
Current Ratio = Current Assets / Current Laibilities
= $305,800 / $170,000
= 1.79
b. The Quick Ratio is similar to the Current Ratio but it calculates if a company can cover it's Current Liabilities with it's liquid assets.
Quick Ratio = Current Assets - Inventory / Current Liabilities
= ($305,800 -$173,800) / $170,000
= 0.78
c. The Cash Ratio checks whether the company can pay it's current Liabilities with it's cash or cash equivalent (Treasury Securities, bank account etc) holdings. Formula is;
Cash Ratio = (Cash+Cash Equivalents) / Current Liabilities
= $50,600 / $170,000
= 0.30
d. Debt ratio shows just how much of the company's assets were acquired through the use of Debt Financing. It's formula is;
Debt Ratio = Current Liabilities + Long Term Liabilities / Total Asssets
= $170,000 +$316,000 / $1,131,800
= 0.43
