Which of the following is NOT true of credit cards?

A firm has current assets that could be sold for their book value of $32 million. The book value of its fixed assets is $70 mill

pickupchik [31]

Answer:

Market value of equity / book value of equity 72/52 = 1.38

The company is a little overvalued.

It means that the assets they have because the rate is declining, have a higher yield than the market, that's why their market value increase, therefore the investor will pay more to acquire the company or shares of the company because their profits will be above the common of the industry.

Explanation:

concept book value market value diference

current assets 32 millons 32 millons 0

long term assets 70 millons 100 millons +30,000,000

liabilities 50 millons 60 millons -10,000,000

TOTALS 70+32 - 50= 52 32+100-60=72 +20,000,000

Market value of equity / book value of equity 72/52 = 1.38

This ratio tries to determinate if a company is being undervalued or overvalued.

It is usually good to help a third party at the task of determinate whether or not a company's market value is suffering from speculation (when extremely overvalued)

When the ratio is below 1 It will mean that it is undervalued. The manager may interpret this that third parties see the company cheap while trading.

When it is above 1, it is overvalued, this means an investor will pay more for a portion of the company than it really has. This can lead to thinking that forecast profit is rising and because of that the investors are paying a premium. But if it gets really high, then it is saying that the company is subject to speculation and the price bubble may explode anytime.

7 0

3 years ago

n the context of the strategies for selecting target markets, which of the following is a disadvantage of undifferentiated targe

algol [13]

Answer:

The correct answer is b. It makes a company more susceptible to competitive inroads.

Explanation:

Market segmentation is essential to know how is the public that makes up the market in which we are. There are a number of advantages and disadvantages of market segmentation that you should keep in mind, before venturing into such a study for your company.

Errors when establishing the segment

The first and main disadvantage of including market segmentation techniques is the wrong selection of a segment.

Keep in mind that if the company chooses a wrong market fraction, too small or irrelevant for the company's business, then the business will find it difficult to market its product.

Commercial Saturation Issues

Another drawback derived from this strategy is to enter a market segment in which there is strong competition and saturation. When we are about to create a company or product we must take into account the development possibilities we have in that market.

3 0

3 years ago

If companies want to encourage people to stay in the workforce as they age, they can create jobs that involve more use of ______

natta225 [31]

If companies want to encourage people to stay in the workforce as they age, they can create jobs that involve more use of labor and less use of younger.

As an individual gets older their tendency and stamina to do more physical labor get decreases. They tend to perform under par as compared to the comparatively younger individuals.

As people age off, companies need to create jobs that require more skills that only an experienced and .wise individual can perform. Jobs that require more than mental and analytical skills should be preferred more for aged individuals.

The companies should also look to make use of the experience of their employees by making them mentors for young age employees.

Learn more about companies at

brainly.com/question/25393740

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5 0

1 year ago

Adjustments help to ensure that __________ balances are reported at amounts representing the economic benefits used during the p

ycow [4]

Answer:

Adjustments help to ensure that asset  balances are reported at amounts representing the economic benefits used during the period.

3 0

3 years ago

Establishing a secure customer or client base is an example of how to deal with this type of risk.

Elan Coil [88]

It would be Operational risky

7 0

3 years ago