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ELEN [110]
3 years ago
10

AA Tours is comparing two capital structures to determine how to best finance its operations. The first option consists of all e

quity financing. The second option is based on a debt-equity ratio of 0.45. What should AA Tours do if its expected earnings before interest and taxes (EBIT) are less than the break-even level? Assume there are no taxes. Group of answer choices
Business
1 answer:
-Dominant- [34]3 years ago
8 0

Answer:

d.select the unlevered option since the expected EBIT is less than the break-even level

Explanation:

Unlevered option comprises of more equity than the  debt, and is thus less risky. While an option leveraged is even more debt than equity, which brings additional risk. Since the estimated EBIT is below the break-even point, it would be safer to go for an unlevered (less riskier) option.

Hence, the correct option is d.

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stellarik [79]
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Anyone want to talk on for...tnite or g.m..<br> eet?????
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2 years ago
Rylan Industries is expected to pay a dividend of $5.70 year for the next four years. If the current price of Rylan stock is $31
PilotLPTM [1.2K]

Answer: Rylan's stock would sell for $21.96 at the end of the four years

Explanation:

PV = Current Price = $31.27

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r = Equity cost of capital = 12%

FV = Price of Rylan's stock at the end of four years = ??

N = Number of years = 4

PV = D [\frac{1 - \frac{1}{(1+r)^{N} } }{r} ] + \frac{FV}{(1+r)^{4} }

31.27 = 5.70 [\frac{1 - \frac{1}{(1+0.12)^{4} } }{0.12} ] + \frac{FV}{(1+0.12)^{4} }

Solve for FV,

FV = $21.96

Rylan's stock would sell for $21.96 at the end of the four years

8 0
3 years ago
Whats 63% of 1827?<br><img src="https://tex.z-dn.net/?f=%20%7B7%20%5Ctimes%208%7D%5E%7B2%7D%20" id="TexFormula1" title=" {7 \tim
MrMuchimi
63% of 1827 is 1179.36
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Four Seasons Hotels sell private residences in several of their properties and send direct mail to prospective residents asking
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Answer:

The correct answer is Lead generation.

Explanation:

A contact or lead is any user of a web page that, at a given time, provides us with their data in a form, thus losing their condition of anonymous visit and becoming a contact on which to track.

Lead acquisition would be all those actions or processes focused on getting contacts with which to nourish our database. In an inbound marketing project it would consist of the Convert or Conversion phase.

Basic characteristics of a lead:

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4 years ago
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