Using balance sheet information, the debt ratio indicates your ability to meet current debt payments. When you are trying to balance your debt payments, the ability to pay your debts and the debt you are gaining reflects your ability to optain loans and other necessary requiremends for business or living expenses.
Answer:
a) 9.00 %
b) 7.80 %
c) yes the weight of the debt increases here is more risk in the investment as the debt payment are mandatory and failing to do so result in bankruptcy while the stock can wait to receive dividends if the income statement are good enough
d) 9.00 %
e) The increase in debt may lñead to an increase in return of the stockholders if they consider the stock riskier than before and will raise their return until the WACC equalize at the initial point beforethe trade-off occurs
Explanation:
a)
Ke 0.12
Equity weight 0.5
Kd(1-t) = after tax cost of debt = 0.06
Debt Weight = 0.5
WACC 9.00000%
c)
Ke 0.12
Equity weight 0.3
Kd(1-t) = after tax cost of debt = 0.06
Debt Weight 0.7
WACC 7.80000%
d)
<em>Ke 0.16</em>
Equity weight 0.3
Kd(1-t) = after tax cost of debt = 0.06
Debt Weight 0.7
WACC 9.00000%
Although the federal reserve had traditionally made discount loans only to commercial banks, in response to the financial crisis in 2008 the fed made primary dealers eligible for discount loans as well.
The U.S. central banking system—the Fed, or the Federal reserve—is the foremost powerful economic establishment within the us, maybe the planet. Its core responsibilities embody setting interest rates, managing the cash offer, and control financial markets.
The Global Financial Crisis of 2008-2009 is widely stated as “The great Recession.” It began with the housing market bubble, created by an overwhelming load of mortgage-backed securities that bundled high-risk loans.
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Answer:b
Explanation:
if you show that other companies profit from what you sell people would want to by the product
E.6.C
Answer:
The correct answer would be option A, The money that goes abroad will come back again when other nations buy our exports.
Explanation:
Keeping money at home means, keeping money within the country. So the traders who do not wish to trade their products outside the country usually give counterargument on this like money goes abroad as a result of imports, will come back to the country again, as a result of the exports, because other countries buy our products and send us money, which means our money will come back eventually. But they normally forget that to achieve this balance, there should be an accurate balance between the imports and exports of the country.
