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Aleksandr-060686 [28]
3 years ago
6

1. The interest tax shield (tax deductibility of interest) is a key reason why: the required rate of return on assets rises when

debt is added to the capital structure. the value of an unlevered firm is equal to the value of a levered the net cost of debt to a firm is generally less than the cost of equity. the cost of debt is equal to the cost of equity for a levered firm.
Business
1 answer:
Ivanshal [37]3 years ago
7 0

Answer:

the net cost of debt to a firm is generally less than the cost of equity.

Explanation:

If we assume both, investor in firms and lender to firms want's a certain return x

because the lender return (the interest) are tax deductible the net cost of debt will be:  x ( 1 - t)

where t is the tax rate being rate beteen 0 and 1

as 1 less a fraction will be less than 1 we can stablish that:

x > x(1 - t)

x is the cost of equity

while x(1-t) is the net cost of debt

therefore, the cost of debt is lower than cost of equity.

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Suppose NoGro, Inc. has just issued a dividend of $2.90 per share. Subsequent dividends will remain at $2.90 indefinitely. Retur
ira [324]

Answer:

Value of one share will be $19.33

Explanation:

We have given dividend every year = $2.90

Required rate of return = 15 %

We have to find the value of one share

Value of one share will be equal to ratio of dividend per year to the required rate of return

So value of one share =\frac{2.90}{0.15}=19.13

So value of one share will be $19.33

5 0
3 years ago
Many years ago G bought a life policy. Since then G decided to replace that coverage with a policy that was purchased firsthand
krok68 [10]

Answer:

A direct response sales

Explanation:

From the statement, it can be seen that G bought the life policy alone and made his decision to replace that coverage with a policy that was purchased firsthand through the insurer and delivered. This shows that an agent was not used in the sale or delivery of the policy and hence this depicts a direct response transaction between the insurer and the client G.

5 0
3 years ago
For each of the goods, classify them according to whether they are rivalrous, nonrivalrous, excludable, or nonexcludable. Rivalr
Jobisdone [24]

Answer:

1. Sports Team Shirt - Excludable / Rivalrous

2. Air we breathe - Non - Excludable / Non - Rivalrous

3. Atlantic Bluefin Tuna - Non -Excludable / Rivalrous

4. A Toll Road - Excludable / Non - Rivalrous

Explanation:

A rivalrous good is one in which usage, by an individual limits the ability of another to use the same good. Rival goods are tangible. This means that they can be held or touched. Examples in this category are; A sports team shirt and, the Atlantic Blue Fin Tuna. Eating a Tuna would limit access to another person, who wants to eat Tuna at that point in time. The same would apply to wearing a sports shirt.

A Non - Rivalrous good is one in which usage by an individual does not limit consumption by another. Most non - tangible goods are non -

rivalrous. Examples in this category are; the air we breathe, and the Toll Road. Almost anyone can access these.

Excludable goods are only used after payment for them has been made. Examples are the Toll Road and the Sports Team Shirt.

Non - Excludable goods can be used even when payment has not been made. Examples are Air and The Atlantic Blue Fin Tuna which anyone can access.

7 0
3 years ago
Which is correct? please help​
choli [55]

Answer:

c

Explanation:

because if you have all new employees people won't see you as a serious company

4 0
2 years ago
Read 2 more answers
Question 1(Multiple Choice Worth 10 points)
san4es73 [151]

Answer:

Option A, Increased mental stress

Explanation:

Increased mental stress  is one of the possible effect of identity theft.

It can cause following negative impacts on the mental and physical health of an individual

a) It causes sleep disturbance

b) Physical symptoms such as aches and pains, heart palpitations, sweating and stomach issues arises

c) Post stress disorder

d) Anxiety

Hence, option A is correct

8 0
2 years ago
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