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emmainna [20.7K]
3 years ago
6

Consider two very different firms, M and N. Firm M is a mature firm in a mature industry. Its annual net income and net cash flo

ws are both consistently high and stable. However, M's growth prospects are quite limited, so its capital budget is small relative to its net income. Firm N is a relatively new firm in a new and growing industry. Its markets and products have not stabilized, so its annual operating income fluctuates considerably. However, N has substantial growth opportunities, and its capital budget is expected to be large relative to its net income for the foreseeable future. Which of the following statements is correct? Select one: a. Firm M probably has a higher dividend payout ratio than Firm N. b. If the corporate tax rate increases, the debt ratio of both firms is likely to decline. c. The two firms are equally likely to pay high dividends. d. Firm N is likely to have a clientele of shareholders who want to receive consistent, stable dividend income. e. Firm M probably has a lower debt ratio than Firm N.
Business
1 answer:
Bumek [7]3 years ago
6 0

Answer:

a. Firm M probably has a higher dividend payout ratio than Firm N.

Explanation:

The dividend payout ratio is commonly referred to a portion of the net income of the company which is paid to the various shareholders in dividends. Therefore, if we consider the statements made in the question, Firm M has a higher annual net income while the annual net income of Firm N is fluctuating, we can conclude that the dividend payout ratio of Firm M is more than that of Firm N.

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ahrayia [7]

In 2005, bankruptcy reform laws:

A: made student loans dischargeable in bankruptcy

B: required debtors to pay more of their debts in bankruptcy

Answer:

B: required debtors to pay more of their debts in bankruptcy

Explanation:

The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) which was passed in 2005, reviewed the bankruptcy process in America.

This law was reviewed because it wanted to prevent abuse of the bankruptcy process.

Therefore, In 2005, bankruptcy reform laws required debtors to pay more of their debts in bankruptcy.

6 0
3 years ago
When comparing mission statements of rival​ firms, perhaps the most important component to examine is​ what?
Veseljchak [2.6K]

Answer:

Self-concept.

Explanation:

Self concept is expressed in a companie's mission and it is the perception one has of his goals, characteristics, behaviours, and abilities.

It is a picture of what we think we are. In a business self-concept is important because it dictates the way we act and think on a daily basis.

When comparing mission statement of rival forms it is beneficial to try and get insights into their self-concept, so that strategies to compete with them can be formulated.

5 0
3 years ago
Which of the following is a condition in the general environment that if exploited effectively helps a company reaches strategic
valentina_108 [34]

Answer:

The correct answer to the following question will be "Opportunity".

Explanation:

  • A market opportunity to sell or contract any commodity, facility, facilities, etc. that will allow the buyer-licensee to set up a business.
  • The licensor of a marketing opportunity usually announces that he or she will protect or support the purchaser in finding a suitable destination or deliver the commodity to the cardholder-licensee.

Therefore, Opportunity is the right answer.

5 0
3 years ago
Mcmurtry Corporation sells a product for $110 per unit. The product's current sales are 12,200 units and its break-even sales ar
denis23 [38]

Answer:

The correct answer is A.

Explanation:

Giving the following information:

Mcmurtry Corporation sells a product for $110 per unit. The product's current sales are 12,200 units and its break-even sales are 10,614 units.

<u>The margin of safety is the number of units or amount of dollars that provide genuine profit to the company. It is the "margin" that gives room to try new strategies</u>.

It is calculated using the following formula:

Margin of safety ratio= (current sales level - break-even point)/current sales level

Margin of safety ratio=  (12,200 - 10,614) / 12,200

Margin of safety ratio= 0.13=13%

5 0
3 years ago
Importance of technology in today's industry?​
Crank

Answer:

Without technology we can’t improve our life.  And without improving technology we are stuck.  Technology is solving all kinds of problems in the world. You can’t remove the problems, there will still be here even if you stop improving technology. And if you solve them, more problems will come.  So technology is used to continuously solve problems, to improve people’s life, economy, education, and so on.  What I think is that technology is one of the pillar of world development. If you remove it, everything else will fall.

3 0
3 years ago
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