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valentina_108 [34]
3 years ago
6

In situation with high risk,credit might create further problems for the borrower.explain.​

Business
1 answer:
rewona [7]3 years ago
3 0

Answer:

Yes, In situation of high risk credit will create more problem due to bankruptcy.

Explanation:

I Think if business will buy more credit in times of high risk then business will end up in stage of bankcruptcy because in that situation business will making poor profits and no revenue so it won't be able to pay back debt.

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Bros Co. expects its EBIT to be $100,000 every year forever. The firm can borrow at 11 percent. Bruce currently has no debt, and
Liula [17]

Answer:

WACC=17.15%

Explanation;

MV of equity=EBIT8(1-t)/Ke          

MV of equity=100,000*(1-.31)/.18=$383,333  

Total value of the firm=Market value of equity+present value of tax savings on interest

Total value of the firm based on EBIT= $383,333+.31*61,000

Total Value of the firm=$402,243

Keg=Keu+(Keu-Kd)*D/E*(1-t)

where Keu= cost of equity of un-geared company=18%

Keg=cost of equity of geared company=?

Kd=cost of debt=11%

Keg=.18+(.18-11)*61,000/(402,243-61,000)*.69

Keg=.18+.0086

Keg=18.86%

NoW revised WACC will be

WACC=Keg*MV of equity+Kd(1-t)*cost of debt/(total value of firm)

WACC=.1886*(402,243-61,000)+.11(1-.31)*61,000/(402,243)

WACC=17.15%                

5 0
3 years ago
In a company's SWOT analysis, which of the following is an example of a strength?
jasenka [17]

in my opinion C is the answer !

Explanation:

i hope u received !if it's correct then thAnk

3 0
3 years ago
Suppose you are eating buffalo wings at a local happy hour. The total utils from doing so after the fourth, fifth, sixth, and se
Rufina [12.5K]

Answer:

diminishing ; assumed

Explanation:

Given:

total utils from doing so after

the fourth, fifth, sixth, and seventh wings are 30, 50, 65, 72

Now,

marginal utility from fifth = total utility from fifth - total utility from fourth

= 50 - 30

= 20 utils.

marginal utility from sixth = total utility from sixth - total utility from fifth

= 65 - 50

= 15 utils.

marginal utility from seventh = total utility from  - total utility from sixth

= 72 - 65

= 7 utils.

Here,

the marginal utility is diminishing i.e from 20 to 15 and from 15 to 7 utils

also,

it is assumed that the marginal utility will decrease when we analyse the consumer utility because the consumers gets satisfied and thus, the increase in satisfaction leads to the decrease in utility

hence, the answer is diminishing ; assumed

4 0
3 years ago
Which statement is true about risk-based financing?
tino4ka555 [31]
Risk-based financing is a way that lenders determine your interest rate for a loan based on how likely you are to repay that loan.
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3 years ago
Why r people asking for s3>< videaos on brainly?????
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Because people are desperate lol
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3 years ago
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