Answer:
Answer for the question:
Consider Optitron Enterprises, a firm that is currently funded entirely with equity. There are 50 million shares outstanding and each share has a current market value of $15. Eric Fredrickson, the CEO, has considered whether the company should take on some debt, as he has learned in his Executive MBA class that some debt can increase shareholder value. Mr. Fredrickson has estimated that the current risk free rate is 1.9% and the expected return on a broad market portfolio is 9%. The company’s marginal tax rate is 40% and its operating beta (also known as unlevered beta) is 0.75. Mr. Fredrickson has contacted an investment banker who has analyzed the firm’s operational risk and financial condition. The investment banker has provided the following schedule of anticipated debt costs at various levels of debt financing. Optitron would use any proceeds from a debt issue to immediately retire outstanding equity by repurchasing shares, also known as a recapitalization. wd rd 0 0.0% 0.20 6.5% 0.40 7.5% 0.60 8.5% 0.80 9.5% 1. Using the Hamada equation, estimate the firm’s beta at each level of debt. 2. Using the CAPM, estimate the firm’s cost of equity at each level of debt.
is given in the attachment.
Explanation:
Answer:
a. full faith and credit of Toga County Corporation
Explanation:
Since these bonds are debentures ( i.e bonds issued by public companies to raise money from the market), they are backed solely by the full faith and credit of the Toga County Corporation. So there is no property backing these bonds.
Answer:
Status quo objective
Explanation:
A status quo objective simply put is an objective is which a situation is maintained as it were as a result of satisfaction derived from the situation and its thought to be the ideal situation.
For a manager satisfied with the current market share and profits, he/she maintains a status quo postion which means that market share and profits neither increase or dcrease thus becoming a constant.
I hope this helps.
Answer:
The $1,200,000 should be accounted for in Grove’s special revenue funds
Explanation:
Special revenue fund: The special revenue fund is a fund that is introduced by the government to collect the money from the public. It is made to fulfill the need for specific purposes/ projects.
The computation of special revenue funds is shown below:
= Income received for providing the meals to the needy people + financing of sales tax with respect to tourist facilities maintenance in the shopping district
= $300,000 + $900,000
= $1,200,000
Answer:
The correct answer is self-management.
Explanation:
Self-management is a system of social and economic organization where the people who develop an activity are the same as managing that business.
That is, in a self-managed company, workers have absolute powers for decision-making and control of the institution.
Self-management is closely related to areas of plurality and deconcentration. So, if it lacks proper planning it can generate duplication of functions (two people or areas performing the same task) and inefficiency in the use of resources.
Self-management is the organization system of a company by which workers participate in all general decisions. In this way, employees are able to carry out administration, production, self-assessment and self-demand tasks. In addition, they own part of the company's share capital and, therefore, participate in the business benefits.
