1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
german
3 years ago
9

Debt Book Equity Market Equity Operating Income Interest Expense Firm A 500 300 400 100 50 Firm B 80 35 40 8 7 1. What is the ma

rket debt-to-equity ratio of each firm? 2. What is the book debt-to-equity ratio of each firm? 3. What is the interest coverage ratio of each firm? 4. Which firm will have more difficulty meeting its debt obligations?
Business
1 answer:
trapecia [35]3 years ago
3 0

Answer:

Data for Question

<u>Debt</u>  <u>Book Equity</u>  <u>Market Equity</u>  <u>Operating Income</u>  <u>Interest Expense</u>

Firm A

500       300                  400                       100                          50

Firm B

80          35                    40                           8                             7

1.

Market debt-to-equity ratio = Debt of Firm / Market Equity

Firm A = 500 /400 = 1.25

Firm B = 80 / 40 = 2

2.

Book debt-to-equity ratio = Debt of Firm / Book Equity

Firm A = 500 /300 = 1.67

Firm B = 80 / 35 = 2.29

3.

Interest coverage ratio = Operating Income / Interest Expense

Firm A = 100 /50 = 2

Firm B = 8 / 7 = 1.14

4.

Firm B will have more difficulty meeting its debt obligations because it has higher debt equity ratio and lower interest coverage ratio than Firm A.

You might be interested in
Connie, a single mother and home-business entrepreneur, enjoys running her own business. However, because she is busy balancing
VladimirAG [237]

Connie can best be described as Solo Operator type of entrepreneur.

Explanation:

Connie is a single mother who works from home on her small business which is her primary source of income but is ridden by the work of house and work which makes her unable to expand her business as she cannot invest enough time in it.

This is happening because she is a sole operator as in she has to take all the decisions and do all the work by herself with no additional help from anyone else whatsoever in the family or the work front either.

7 0
3 years ago
An annuity that goes on indefinitely is called a perpetuity. The payments of a perpetuity constitute a/an series. The equation i
Alborosie

Answer:

Present value of the security = $1,888.89

Explanation:

The annual dividend of $170 represents a perpetual income stream. The present value of a perpetuity is calculated as follows:

PresentValue=\frac{Coupon}{r}

where r =interest rate per annum that would be compounded for each year

Therefore, present value of the security = \frac{170}{0.09} = $1,888.89

4 0
3 years ago
The American Red Cross creates advertisements to encourage people to donate blood. After viewing one, Amanda decided to donate a
mestny [16]

Yes, because the donated blood was exchanged for a feeling of satisfaction

<h3><u>Explanation:</u></h3>

Any organization needs advertising as a major part of making their goods and services move towards consumers. Advertising refers to the act of drawing the attention of people in getting a product or service. A good advertising results in making the consumers purchase that particular product or service or doing certain actions that are being advertised.

In the given example, The American Red cross advertises for making people donate blood. After viewing the ad, Amanda decided to donate her blood. From the given statement, it is concluded that, there is a marketing sense as the donated blood was exchanged for a feeling of satisfaction.

3 0
3 years ago
According to Sheryl Connelly, Ford's global consumer trends manager, millennial buyers want lifestyle accessories on their vehic
Klio2033 [76]

Lifestyle can be defined through various perspectives, depending on the type of approach used to answer the question. The term itself was first conceptualized by the psychologist Alfred Adler, which defines it as “a person’s basic character as established as early in childhood”.

Marketing, however, prefers to define lifestyle as (A) an individual's pattern of living expressed through activities, interests, and opinions.

6 0
3 years ago
Cost of debt For which capital component must you make a tax adjustment when calculating the weighted average cost of capital (W
professor190 [17]

Answer:

your dog

Explanation:

because its your dog

5 0
3 years ago
Other questions:
  • Lyla faces the challenge of developing the promotion mix for a new business. Given the uniqueness of the new products and a very
    14·1 answer
  • Which statement is a PRIMARY characteristic of a capitalist system?
    12·2 answers
  • An investor purchases one municipal bond and one corporate bond that pay rates of return of 7% and 8.4%, respectively. If the in
    15·1 answer
  • Optimus Company manufactures a variety of tools and industrial equipment. The company operates through three divisions. Each div
    13·1 answer
  • Tanning Company analyzes its receivables to estimate bad debt expense. The accounts receivable balance is $390,000 and credit sa
    6·1 answer
  • Help for 10 stars pls . how can i make money eficently if i cant run a lemonade stand or do chores
    6·1 answer
  • "________ refers to the use of key performance indicators to monitor performance of the entire supply chain, including sourcing,
    8·1 answer
  • A company with excess capacity must decide between scrapping or reworking units that do not pass inspection. The company has 19,
    15·1 answer
  • How could the adoption of blockchain within a supply chain help the world become more sustainable and, in some cases, eco-friend
    14·1 answer
  • Charlotte purchases a residence for $105,000 on April 13, 2010. On July 1, 2018, she marries Howard and they use Charlotte's hou
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!