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seraphim [82]
3 years ago
10

Name one way establishing credit

Business
1 answer:
Elden [556K]3 years ago
6 0
Trade credit. or credit card where there is a specified deadline for the payment to be made for the item bought on credit
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Locomotive Corporation is planning to repurchase part of its common stock by issuing corporate debt. As a result, the firm’s deb
QveST [7]

Answer: See explanation

Explanation:

a. What is the market value of Locomotive Corporation before and after the repurchase announcement?

Equity value = Debt value / Debt to equity ratio

= 3,300,000/0.3

= 11,000,000

Market value = Debt value + Equity value

= $3,300,000 + $11,000,000

= $14,300,000

b. What is the expected return on the firm’s equity before the announcement of the stock repurchase plan?

To solve this, we need to know the interest payment first which will be:

= $3,300,000 × 9%

= $3,300,000 × 0.09

= $297000

Return on equity will now be:

= (EBIT - interest) / Equity

= (1320000 - 297000) / 11000000

= 9.30%

c. What is the expected return on the equity of an otherwise identical all-equity firm?

This will be:

= Earnings before Interest / Unlevered firm value

= 1320000 / 14300000

= 9.23%

d. What is the expected return on the firm’s equity after the announcement of the stock repurchase plan?

This will be:

= 9.23% + 50% × (9.23% - 9%)

= 9.35%

5 0
3 years ago
Which statement is not true about the minimum wage?
mamaluj [8]

Answer:

Owners are not required to pay it to foreign workers.

Explanation:

Owners must pay it to any worker regardless of its nationality.

4 0
2 years ago
Read 2 more answers
Additional data: 1. Dividends declared and paid were $25,400. 2. During the year, equipment was sold for $8,700 cash. This equip
Alja [10]

Answer:

Preparation of Cash flow statement is below:-

Explanation:

Please find the full information of question

The following are the financial statements of Nosker Company. NOSKER COMPANY Comparative Balance Sheets December 31 Assets 2017 2016 Cash $36,400 $19,600 Accounts receivable 33,000 19,200 Inventory 31,000 20,400 Equipment 59,400 77,600 Accumulated depreciation—equipment (29,800 ) (23,700 ) Total $130,000 $113,100 Liabilities and Stockholders’ Equity Accounts payable $28,700 $ 16,100 Income taxes payable 7,100 8,000 Bonds payable 26,300 32,500 Common stock 18,200 13,600 Retained earnings 49,700 42,900 Total $130,000 $113,100 NOSKER COMPANY Income Statement For the Year Ended December 31, 2017 Sales revenue $242,100 Cost of goods sold 175,500 Gross profit 66,600 Operating expenses 23,900 Income from operations 42,700 Interest expense 2,400 Income before income taxes 40,300 Income tax expense 8,100 Net income $32,200. Prepare a statement of cash flows for Nosker Company using the direct method.

                    Nosker Company

            Statement of cash flow

         For the year ended 31 December, 2017

Cash flow from operating activities

Receipt from customers       $228,300

($242,100 - $13,800)

Less Cash payment

Suppliers                                $173,500

($175,500 + $10,600 - $12,600)

Operating expenses             $8,300

(23,900 - $15,600)

Income tax expenses           $900

($8,100 + $900)

Interest expenses                $35,100

Cash flow from investing activities

Sale of equipment                                       $8,700

Net cash provided by Investing activities  $8,700

Cash flow from financing activities

Issuance of company stock                         $4,600

Less: Land Redemption                                $6,200

Less: Payment of cash dividend                   $25,400

Net cash used by financing activities           $27,000

Net Increase in cash                                         $16,800

Beginning cash                                                 $19,600

Cash at end of period                                       $36,400

7 0
3 years ago
Dave and Kelly are discussing how quickly products now become obsolete in their industry. David believes this will make it more
Paha777 [63]

Answer: Incorret

Explanation: This is incorrect because the more information we have about the market and the obsolescence time of our products, the better we will be able to coordinate the marketing strategy so that the time spent will be paid with greater profits in the future.

For example, appliances affected by competition or improvements become appliances that replace the previous ones if you do not evaluate the obsolescence time of these items, it is likely that when our product is launched, there is already a better one in the market.

6 0
2 years ago
Zoom Enterprises expects that one year from now it will pay a total dividend of $ 5.0 million and repurchase $ 5.0 million worth
uranmaximum [27]

Answer:

Consider the following calculations

Explanation:

The price per share is computed as shown below:

Present value of equity is computed as follows:

= $ 10 million / 0.13

= $76,923,076.92

Now we shall divide it by the number of shares to get the price per share

= $76,923,076.92 / 5,000,000

= $ 15.38 per share

Feel free to ask in case of any query relating to this question

5 0
3 years ago
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