When some one or something solves the problem
Answer:
Market capitalization - $155.26
Stock price - $26.77
Explanation:
The computation of the market capitalization is shown below:
= last year dividend × (1 + growth rate) ÷ (cost of capital - growth rate)
= $5.18 billion × ( 1 + 7.9%) ÷ (11.5% - 7.9%)
= $5.58,922 billion ÷ 3.6%
= $155.26
And, the stock price would be
= Market capitalization ÷ outstanding shares
= $155.26 ÷ 5.8 billion
= $26.77
The potential risk that the investors may face when this is made use is that the issuer may not be able to make profit when the bonds are considered to offer as a guaranteed return because they are honored by law and with that, this will cause the value of the bond to be lowered when exposed in the market in which the return will also be lower when return to the investors.
Answer:
A.True
Explanation:
the net profit will drop for 0.05 to 0.045
but the as the equity multiplier increase to 2 this means equity finance 50% of the company thus, the return on equity will be of:
Assets turnover x profit margin = 0.0675
that is the return on assets.
but equity present half the assets thus, the multiplier is 2
return on assets x equity multiplier = return on equity
0,0675 x 2 = .135 = 13.5%
This makes the statemnt true, the comapny will benefit from taking debt as will increase the return on the stockholders which is the goal for a good management.
The obligation of the seller of the receivables to pay the purchaser in case the debtor fails to pay.
