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kvv77 [185]
3 years ago
13

A local firm has debt worth $200,000, with a yield of 9%, and equity worth $300,000. It is growing at a 5% rate, and its tax rat

e is 40%. A similar firm with no debt has a cost of equity of 12%. Under the MM extension with growth, what is the value of your firm's tax shield, i.e., how much value does the use of debt add?
Business
1 answer:
Over [174]3 years ago
8 0

Answer:

local firm has debt worth $200,000, with a yield of 9%, and equity worth $300,000. It is growing at a 5% rate, and its tax rate is 40%. A similar firm with no debt has a cost of equity of 12%. Under the MM extension with growth, what is the value of your firm's tax shield, i.e., how much value does the use of debt add?

Explanation:

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The board of directors declared cash dividends totaling $160,000 during the current year. The comparative balance sheet indicate
Nikitich [7]

Answer: $164,300

Explanation:

Cash payments to stockholders shows the total amount that the shareholders of a company got during the year. It includes the money owed to them at the start of the year in addition to cash paid during the year.

= Beginning dividends payable + Dividends for the year - Ending dividends

= 43,200 + 160,000 - 38,900

= $164,300

8 0
3 years ago
Debra's manager publicly reprimanded her in the department meeting. during the manager's 10 minute rant, debra sat quietly. afte
muminat

Answer: C) a tend-and-befriend strategy.

Explanation:

The Tend and Befriend strategy is a relatively new theory that tries to explain another way humans respond to stress.

Recent studies have shown that women are the main proponents of this theory because while men would rather prefer a 'Fight or Flight' approach, women can reduce stress faster when going by this theory as they are more likely to nurture and tend to their offspring as well as rely on their close ones as a support system who they can lean on in hard times.

Debra was stressed by her job and went to talk to her friend about it. It could be said therefore that Debra's friend is her support system. Also notice how Debra is now laughing which shows a reduction in stress has talen place thereby confirm this theory.

8 0
3 years ago
Lawrence Company has cash in bank of $22,000, restricted cash in a separate account of $4,000, and a bank overdraft in an accoun
andre [41]

Answer:

$22,000

Explanation:

It is worth noting that for accounting purposes, restricted cash is one that is not readily available. Such inaccessible funds, therefore, cannot be reported in financial statements. A bank overdraft, on the other hand, is a liability. Lawrence should therefore report cash worth $ 22,000 only.

3 0
3 years ago
What statement about pawn shops is correct?
Gnom [1K]
The correct answer for the question that is being presented above is this one: "B. A pawn shop has lower interest rates than banks." The statement about a pawn shop that is correct is this one: <span>B. A pawn shop has lower interest rates than banks.</span>
6 0
3 years ago
Which of the following statement(s) is/are False? Assume a positive interest rate
gtnhenbr [62]

Answer:

False Statement:

B. Only II is False.

Explanation:

If the cash flow from a project is farther out, the present value will be lower, all else being equal.  This is because of the time value of money.  This concept states that the money you receive today is higher in value than the same amount received in the future.  And if the future is father out, then the value of the money will continue to reduce in relative value based on this time value of money concept.

5 0
3 years ago
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