Answer:
If a firm decreases its sustainable growth rate (g), the price of their stock will probably decrease. I will use the following example:
P₀ = Div₁ / (Re - g)
P₀ = $2 / (12% - 5%) = $28.57
if the growth rate g decreases to 2%, and the rest remains unchanged, then
P₀ = $2 / (12% - 2%) = $20
If they remained a small business by choice of the owners, then the owners might be called "micropreneurs".
Some people by choice don't expand their businesses, usually not having more than five employees. Micropreneurs are business people willing to acknowledge the danger of beginning and dealing with the sort of business that remaining small, gives them a chance to do the sort of work they need to do, and offers them an adjusted way of life. Numerous business people remain little by decision.
Answer:
treasury
Explanation:
Treasury shares are shares that have been issued and later repurchased by the company. They decrease the total number of shares outstanding .
Treasury shares are not used to calculate earnings per share
treasury shares do not have voting rights
Treasury stock is a contra equity account recorded in the shareholder's equity
Answer:
WACC of ABC Corporation is 91%
Explanation:
WACC = Kd * (1+T) * Debt/Debt+Equity + Ke * Debt/Equity
Kd = Cost of debt
T = Corporate tax rate
WACC = 0.08*(1-0.35)*(150m/150m+650m) + 0.10*(650m/150m+650m)
WACC = 0.08 *0.65*0.1875 + 0.10*0.8125
WACC = 0.00975 + 0.08125
WACC = 0.091
WACC = 91%
Therefore, the WACC of ABC Corporation is 91%
Answer:
The correct answer is: Profit Sharing Plan.
Explanation:
A Profit Sharing Plan is a type of retirement plan where employers provide workers contributions based on their income and company's earnings. A Profit Sharing Plan is suitable for companies with changing earnings because in case the firm does not have revenues given a period, the firms are not obligated to provide contributions to its employees.
The maximum contribution is higher relative to other retirement plans -25% for the Profit Sharing Plan. Top managers would be benefited since they receive higher wages.