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Naya [18.7K]
2 years ago
7

Having a good credit score is important because

Business
2 answers:
raketka [301]2 years ago
6 0
It reflects how likely an individual is to pay off their debts.  Banks and other lending institutions, and sometimes even landlords, look at your credit score, before lending or renting to you.
zvonat [6]2 years ago
5 0
It shows you're trustworthy and banks will be more willing to loan you money
You might be interested in
Multiple Choice Question 121 The following information pertains to Ortiz Company. Assume that all balance sheet amounts represen
olasank [31]

Answer:

Inventory TO 5.5

This means Ortiz sales his inventory 5.5 times per year.

Explanation:

Inventory turnover for Ortiz

\frac{COGS}{Average Inventory} = $Inventory Turnover

​where:

$$Average Inventory=(Beginning Inventory + Ending Inventory)/2

COGS:     66,000

In this case the average inventory is provided already: 12,000

\frac{66000}{12000} = $Inventory Turnover

Inventory TO 5.5

This means Ortiz sales his inventory 5.5 times per year.

5 0
3 years ago
Pier is trying to determine which leadership style to use in making a decision that may have a major impact on his company. He’s
oksian1 [2.3K]

Answer:

The answer is: Normative leadership model

Explanation:

The normative leadership model requires Pier to analyze the following seven situations:

  1. How will my decision will affect the organization?
  2. Is it important that team members are committed to the decision making process.?
  3. As a leader, do I possess the knowledge to solve try to solve this issue?
  4. If only I are responsible for making the decision, will the rest of the team be committed to it?
  5. My team members support me and the organization?
  6. The team members possess the knowledge to try to solve this issue?
  7. Can team members unite and really work as a team to solve this issue?

Depending on what Pier believes the correct answers are for the above questions, he can decide to use one of the following decision making processes:

  1. Decide: Pier makes the decision by himself with little or no participation of the team members.  
  2. Consult (Individually): Pier consults the team members individually, deciding what information to use, and then makes a decision by himself.  
  3. Consult (Group): Pier organizes a group meeting where all members express their opinions, then decides what information is useful and makes the decision by himself.  
  4. Facilitate: Pier organizes a group meeting and presents his opinion and every group member participates. The decision is made by group consensus.
  5. Delegate: Pier leaves the decision making process entirely to the group members and doesn't participate in it.
6 0
3 years ago
Caspian Sea is considering raising $33.00 million by issuing preferred stock. They believe the market will use a discount rate o
Hitman42 [59]

Answer:

1,212,723 shares

Explanation:

Given that,

Value of issuing preferred stock = $33,000,000

Discount rate = 11.87%

Dividend paid = $3.23

Price of preferred stock:

= Annual dividend ÷ discount rate

= $3.23 ÷ 0.1187

= $27.2115

Shares will they need to issue:

= Value of issuing preferred stock ÷ Price of preferred stock

= $33,000,000 ÷ $27.2115

= 1,212,723

3 0
3 years ago
Suppose your company needs $13 million to build a new assembly line. Your target debt-equity ratio is .55. The flotation cost fo
natulia [17]

Answer:<em>True cost = \frac{cost of assembly}{1-weighted flotation cost }</em>

<em>=  \frac{13,000,000}{1- 0.049}</em>

<em>= $ 13,669,821.2</em>

Explanation:

Given :

Debt-Equity ratio = 0.55

Flotation cost for new equity = 6%

Flotation cost for debt = 3 %

∴ To compute the weighted flotation cost , we'll use the following formula:

Weighted Flotation cost =\left [ \frac{1}{1+Debt-Equity ratio}\times Flotation cost of equity \right ] + \left [ \frac{Debt-Equity ratio}{1+Debt-Equity ratio}\times Flotation cost of debt \right ]

=  \left [ \frac{1}{1+0.55}\times 0.06 \right ] + \left [ \frac{0.55}{1+0.55}\times 0.03 \right ]

= 0.0387 + 0.0106

= 0.04934 or 4.93%

The true cost of building the new assembly line after taking flotation costs into account is evaluated using the following formula :

True cost = \frac{cost of assembly}{1-weighted flotation cost }

=  \frac{13,000,000}{1- 0.049}

= $ 13,669,821.2

3 0
3 years ago
Simon Software Co. is trying to estimate its optimal capital structure. Right now, Simon has a capital structure that consists o
lidiya [134]

Answer:

14.35%

Explanation:

Simon Software Co

rs= 12%

D/E = 0.25

rRF= 6%

RPM= 5%

Tax rate = 40%.

We are going to find the firm’s current levered beta by using the CAPM formula which is :

rs = rRF+ RPM

12%= 6% + 5%

= 1.2

We are going to find the firm’s unlevered beta by using the Hamada equation:

=bU[1 + (1 −T)(D/E)]

Let plug in the formula

1.2= bU[1 + (0.6)(0.25)]

1.2=(1+0.15)

1.2= 1.15bU

1.2÷1.15

1.0435= bU

We are going to find the new levered beta not the new capital structure using the Hamada equation:

b= bU[1 + (1 −T)(D/E)]

Let plug in the formula

= 1.0435[1 + (0.6)(1)]

=1.0435(1+0.6)

=1.0435(1.6)

= 1.6696

Lastly we are going to find the firm’s new cost of equity given its new beta and the CAPM:

rs= rRF+ RPM(b)

Let plug in the formula

= 6% + 5%(1.6696)

= 14.35%

3 0
3 years ago
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