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goblinko [34]
3 years ago
7

A firm's CFO is considering increasing the target debt ratio, which would also increase the company's interest expense. New bond

s would be issued and the proceeds would be used to buy back shares of common stock. Neither total assets nor operating income would change, but expected earnings per share (EPS) would increase. Assuming the CFO's estimates are correct, which of the following statements is CORRECT?a. Since the proposed plan increases the firm's financial risk, the stock price might fall even if EPS increases.b. If the plan reduces the WACC, the stock price is likely to decline.c. Since the plan is expected to increase EPS, this implies that net income is also expected to increase.d. If the plan does increase the EPS, the stock price will automatically increase at the same rate.e. Under the plan there will be more bonds outstanding, and that will increase their liquidity and thus lower the interest rate on the currently outstanding bonds.
Business
1 answer:
mylen [45]3 years ago
6 0

Answer:

A

Explanation:

Since the proposed plan increases the firm's financial risk, the stock price might fall even if EPS increases.

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According to keynesianism, as more items are being made, what happens to prices?
kupik [55]

<u>According to keynesianism, as more items are being made, what happens to prices D. the prices stay the same</u>

Explanation:

Keynes advocated that an increased government expenditures and lower taxes can  stimulate demand and it can pull  the global economy out of the depression.

Keynesians believe that, because prices are somewhat rigid, fluctuations in any component of spending like consumption, investment, or government expenditure will cause the output to change. If government spending increases, for example, and all other spending components remain constant, then output will increase.

<u>According to keynesianism, as more items are being made, what happens to prices D. the prices stay the same</u>

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3 years ago
Read 2 more answers
If Joe were to introduce himself as Dr. Early to sell to Gensol, knowing that people would assume that he was a medical doctor,
valentina_108 [34]

Answer:

C

Explanation:

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Just to increase sales he must not introduce himself as doctor of anything, considering the fact that people will consider him medical doctor and rely on his opinion. Its purely unethical and immoral.  

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3 years ago
Professional standards are achieved through _____________.
zvonat [6]

Answer:

The correct answer is Habitual Practice

Explanation:

7 0
3 years ago
Which 3 should be entered as individual transactions, with their original dates, rather than entered using the initial journal e
Lerok [7]

a. Check to utility company for $87.26.

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e. Check to the telephone company for $54.19

Telephone expense, Utility expense and Rent Invoices issued to barbers require a new journal entry.

An expense is an item that generally requires an outflow of money or some form of property to another person or group in payment for an item, service, or other category of expense. For tenants, rent is an expense. For students and parents, teaching is a cost.

Expenses are money that costs or must be spent to do something. Most of the marble was imported from Italy at great expense. Vacations with dogs can often come at an additional cost. It wasn't a lot of money, but it helped me pay my bills.

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6 0
2 years ago
A firm uses a standard costing system and allocates variable overhead costs based on direct labor hours. The annual budget proje
DENIUS [597]

Answer:

Your answer is given below:

Explanation:

Statement showing Computations  

         Paticulars                                                                             Amount

Variable overhead cost per unit =100,000/1,000                   100.00

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Actual Variable overhead             75,000.00

Variable overhead spending variance= Standard VO - Actual VO  

Variable overhead spending variance= 75,000 - 75,000  

Variable overhead spending variance= 0

8 0
3 years ago
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