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Yuri [45]
3 years ago
9

You are thinking of investing in Ski Sports, Inc. You have only the following information on the firm at year-end 2018: net inco

me = $50,000, total debt = $1 million, and debt ratio = 70 percent. What is Ski's ROE for 2018?
Business
1 answer:
Jlenok [28]3 years ago
3 0

Answer:

Roe will be equal to 11.67 %

Explanation:

We have given net income = $50000 = $0.05 million

Total debt = $1 million

Debt ratio = 70% = 0.70

We have to find the ROE

Debt ratio is ratio o debt and assets

So 0.7=\frac{1}{assets}

Assets = $1.42 million

Now equity will be equal to assets - debt

So equity = $1.42 - $1 = $0.42 million

Now equity ratio is equal to ratio of net income and equity

So equity ratio \frac{0.05}{0.42}=0.1167 = 11.67 %

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Jordan has the following assets and liabilities: Two cars $10,000 House $200,000 Mortgage $100,000 Cash $1,000 Car loans $3,000
kirill [66]

Answer: B. increase to $209,000;increase to $209,000

Explanation:

<em>If he uses that money to pay off his mortgage, his wealth would </em><em><u>increase to $209,000</u></em><em> if he puts that money in his checking account, his wealth would </em><em><u>increase to $209,000.</u></em>

<u></u>

A person's wealth is calculated by deducting their liabilities from assets. In this case Jordan's wealth is;

= 10,000 + 200,000 + 1,000 + 2,000 - 100,000 - 3,000 - 1,000

= $109,000

If he pays off the Mortgage his debt will reduce by $100,000 which will increase his wealth to $209,000.

If he puts the money in his checking account, his assets will increase by $100,000 which will bring his wealth to $209,000 as well.

7 0
3 years ago
Is the QA in lalalalalalal
marishachu [46]
Yes it is lalalalalala
7 0
2 years ago
Read 2 more answers
Southern Corporation has a capital structure of 40% debt and 60% common equity. This capital structure is expected not to change
Valentin [98]

Answer:

Cost of equity = 10.9%

Explanation:

<em>The Dividend Valuation Model(DVM) is a technique used to value the worth of an asset. According to this model, the value of an asset is the sum of the present values of the future cash flows would that arise from the asset discounted at the required rate of return.</em><em> </em>

If dividend is expected to grow at a given rate , the value of a share is calculated using the formula below:

D0× (1+g)/Po × (1-F) + g

Do - dividend in the following year, K- requited rate of return , g- growth rate , F= Floatation cost in %

DATA:

D0- 3.68

g- 5%

P=67

K- ?

Po×(1-F)= 67-3.68=$63.32

Ke = 3.68× 1.05/ 63.32   + 0.05 =0.109

Cost of equity = 0.109× 100= 10.9%

Cost of equity = 10.9%

7 0
3 years ago
To project a trend that decreases rather than increases, use a step value of less than _______ for a linear trend.
Eddi Din [679]
Less than 0 for a linear trend, because the trend is no longer a trend but a FAD.
7 0
3 years ago
Why might an endorser want to limit the term of an endorsement contract with a company?
oee [108]

Answer:

for better opportunities

Explanation:

Endorsers are usually in exclusive contract with companies that forbids them to work with other competitors. Celebrities have their high or low times, when they are at their peak popularity, they would want to be associated with the best and top of the line brands and vice versa. They prefer to switch according to the situation that's why they try to limit the term of contract.

8 0
3 years ago
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