All categories

3 years ago

The sustainable growth rate is based on the premise that:

1 answer:

7 0

It is based on the premise that the sustainable growth rate is that the debt-equity ratio will be held constant. The sustainable growth rate is the maximum rate of growth of the firm that sustain without having to increase financial leverage for outside financing. It is measure of how large the firm and how quickly it can row without borrowing more money.

You might be interested in

A cylindrical candle that is 15 cm high has a diameter of 8 cm. Sketch

drek231 [11]

Answer:

See the figure attached with the sketch of the shape.

Volume = 0.75m³

Explanation:

The sketch of the shape is shown on the diagram attached indicating the height (15 cm), the diameter (8cm), and the radius (4cm).

The volume of a cylindrical shape is calculated with the formula:

$Volume=\pi \times radius^2\times height$

The radius is half the diameter: 8cm / 2cm = 4 cm.

To express in terms of m (meters) convert the radius and the height from cm to m:

15cm × 1m/100cm = 0.15m

4cm × 1m/100cm = 0.04m

Substitute in the formula and compute:

$Volume=\pi \times (0.04m)^2\times (0.15m)\\ \\ Volume=0.75m^3$

6 0

2 years ago

Kasey Corp. has a bond outstanding with a coupon rate of 5.82 percent and semiannual payments. The bond has a yield to maturity

Vilka [71]

Answer:

The quoted price of the bond is $1,748.41

Explanation:

The quoted price of the bond can be computed using the pv formula in excel which is given below:

=-pv(rate,nper,pmt,fv)

The rate is semiannual yield to maturity since the bond pay interest semiannually,which is 6.9%/2=3.45%

nper is the number of coupon interests the bond would pay over its entire bond life which is 24 years multiplied 2 i.e 48

pmt is the coupon interest payable semiannually which is $2000*5.82%/2=$58.20

The fv is the face value of the bond at $2000

=-pv(3.45%,48,58.20,2000)=$ 1,748.41

The bond quoted price is currently $ 1,748.41

3 0

3 years ago

A company that has both debt and equity in its capital structure will use its weighted average cost of capital (WACC) as its dis

myrzilka [38]

Answer:

In general, the higher the risk of a firm as perceived by its existing and potential investors, the greater is the firm’s weighted average cost of capital (WACC).

If a firm is considered to be risky, they will get debt at a high rate to compensate for the risk making WACC greater.

The calculation of a firm’s weighted average cost of capital should be based on the after-tax cost of the dollar of financial capital raised.

Interest is tax deductible so WACC is calculated net of taxes to cater for this.

It is generally believed that the proportions, or weights, used in the calculation of a firm’s weighted average cost of capital should be based on the market values of the firm’s capital sources. This is because the market value weighting system is more consistent with maximizing the value of the firm’s Shareholder wealth.

Market Values are the true reflection of shareholder wealth and this is what the company should aim to maximise.

Although the use of market value weights is theoretically superior to the use of book value weights in the calculation of a firm’s weighted average cost of capital (WACC), firms often use book value weights due to their relative stability compared to the daily changes in market values. True

Market values tend to fluctuate quite often so it is easier for companies to use book value amounts.

A firm’s new investments, existing assets, and capital structure affect its overall degree of risk and, in turn, its weighted average cost of capital. True

The assets and potential assets that a company has as well as how it funded those assets determine just how risky the company is and as earlier mentioned, the riskier the firm, the higher the WACC so risk does have an effect on WACC.

3 0

3 years ago

Gabuat Corporation, which has only one product, has provided the following data concerning its most recent month of operations:

Ludmilka [50]

Answer:

Gross Margin $82,130

Explanation:

The computation of the gross margin under the absorption costing approach is as follows:

Sales ($147 × 1,910 units) $280,770

Less:

Direct Material ($47 × 1,910 units) $89,770

Direct Material ($34 x 1,910 units) $64,940

Variable Manufacturing Overhead ($5 × 1,910 units) $9,550

Fixed Manufacturing Overhead ($39,600 ÷ 2,200 units) × $1,910 units $34,380

Gross Margin $82,130

5 0

2 years ago

A firm that produces bluetooth speakers collected the following data to determine their possible profits. What profit will bluet

Lostsunrise [7]

The profit will Bluetooth speaker sales bring this firm when it sells at the profit-maximizing level of output is $975

Profit-maximizing level

In economics, profit maximizing level of output means where its marginal cost (MC) just equals the product price and where marginal cost is increasing; that is, the MC curve is sloping upward.

Given

A firm that produces Bluetooth speakers collected the following data to determine their possible profits.

Here we need to find the profit will Bluetooth speaker sales bring this firm when it sells at the profit-maximizing level of output.

In order to find the profit-maximizing level of output for the Bluetooth, we have to subtract the maximum price by the minimum price.

For example let us consider $1000 be the maximum price of the Bluetooth and $25 is minimum price of the Bluetooth,

Then the profit-maximizing level of output is calculated as,

=> 1000 - 25

=> 975.

To know more about profit-maximizing level here.

brainly.com/question/14011960

#SPJ4

4 0

1 year ago