What is a credit score

g "6. Financially, why would a company: (a) increase its dividend; (b) buy back some of its common stock shares; (c) pay down so

VikaD [51]

Answer:

(a) increase its dividend;

dividends are increased for two reasons:

the company has excess cash and it doesn't have any possible investments on hand
the board and upper management want to increase the stock price and higher dividends always result in higher stock prices, even if it is only in the short run.

(b) buy back some of its common stock shares;

the company has excess cash and the board and upper management believe that the stock price is too low.

(c) pay down some of its debt;

the company has excess cash and it considers that the cost of its debt is too high and it can get cheaper financing from other sources if needed.

(d) increase its use of internal financing;

the board and upper management considers that the company needs to invest in new or existing projects and they consider that the financing costs are too high. Also, on the long run if things work well, the stock price should increase.

(e) take the public firm private

the company has excess cash and the board and upper management believe that the stock price is too low. It is similar to (b) only on an extreme situation.

5 0

3 years ago

A retrofitted space-heating system is being considered for a small office building. The system can be purchased and installed f

Margaret [11]

Answer:

Retrofitted Space-Heating System

Benefit-Cost Ratio = $75,420/$121,521

= 0.6206

= 0.62

Benefit is less than 1. Therefore, project will not deliver positive NPV.

Recommendation:

It is better and cheaper to incur electricity costs than to purchase the retrofitted space-heating system. The retrofitting benefit does not justify the cost of the project.

Explanation:

a) Data and Calculations:

Purchase cost of system = $125,000

Salvage value (PV of $7,000 in five years) = $3,479

Total cost of project = $121,521 ($125,000 - 3,479)

Benefit of Project = Savings in 250,000 kWh annually

Cost of a kilowatt-hour = $0.09

Total annual cost of electricity = $22,500 (250,000 * $0.09)

Annuity Factor for 5 years = 3.352

Present value of annuity of $22,500 = $75,420 ($22,500 * 3.352)

Benefit-Cost = $75,420/$121,521

= 0.6206

= 0.62

6 0

4 years ago

In our class discussion of Cultural Pollution, we heard an example of provocative ads for Clearasil that upset come parents. In

vesna_86 [32]

Answer:

The correct answer is allowed to run; consumers will stop buying products if the ads are offensive.

Explanation:

The world of advertising is so big and rich that it is difficult to make a judgment about it. To please all the people who will see an advertisement to buy the product that is advertised, is a titanic work carried out by designers, the creators. The truth is that I can not imagine how they get so many ideas from their brain, I guess there will come a time when they run out, right?

Well, maybe not now, but in other times, the ads that were made were really bad and especially inappropriate and even violent, but still, the companies published them and people welcomed them, because otherwise, I can't understand , why they allowed this type of commercial to advertise a product.

8 0

4 years ago

Typically, the only credit to the retained earnings account for a corporation is

erma4kov [3.2K]

<u>Answer</u> is C. net income of the period

A is wrong because withdrawals by owners would only reduce the credit and not add anything to it.

B is also wrong since debiting the retained earnings will also decrease the equity so it will result in a net loss for the company.

Answer is C since crediting the net earning implies that the organization earned some profit which would increase the equity.

D is wrong too because the initial investment does not go to the retained earnings.

3 0

3 years ago

Read 2 more answers

Identify three of many shared ethical standards among businesses

Orlov [11]

Answer:

✓ Social responsibility, fair pricing, truth in advertising

Explanation:

4 0

3 years ago

What is a credit score ​

What is a credit score