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Virty [35]
2 years ago
15

Beranek Corp has $695,000 of assets (which equal total invested capital), and it uses no debt - it is financed only with common

equity. The new CFO wants to employ enough debt to raise the total debt to total capital ratio to 40%, using the proceeds from borrowing to buy back common stock at its book value. How much must the firm borrow to achieve the target debt ratio?
Business
1 answer:
lesya692 [45]2 years ago
3 0

Answer:

$278,000

Explanation:

Data provided:

Total invested capital or assets = $695,000

Total debt to total capital ratio = 40%

now,

\frac{\textup{Total debt}}{\textup{Total capital}} = \frac{\textup{40}}{\textup{100}}

or

Total debt = 0.4 × Total capital

or

Total debt = 0.4 × $695,000

or

Total debt = $278,000

Hence,

The firm must borrow $278,000 to achieve the desired ratio

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Answer:

Open end

Explanation:

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The prices for open end funds are fixed once daily which shows the performance of the investment for that day hence the only price at which investment shares can be bought for that day.

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3 years ago
Employers prefer to review a___ resume when the history is the most important consideration. A) targeted b) combination c) chron
jeyben [28]
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3 years ago
Justine has just started a company that makes notebooks and other stationery items out of recycled materials. She has decided to
Zigmanuir [339]

Answer:

10% is a high-profit margin

Explanation:

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4 0
3 years ago
If net operating income is $83,000, average operating assets are $415,000, and the minimum required rate of return is 13%, what
tester [92]

Answer:

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Explanation:

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Here

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This should be the answer and the options provided are wrong

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Fynjy0 [20]

Answer:

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