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Dvinal [7]
3 years ago
6

Beranek Corp has $720,000 of assets, and it uses no debt--it is financed only with common equity. The new CFO wants to employ en

ough debt to raise the debt/assets ratio to 40%, using the proceeds from borrowing to buy back common stock at its book value. How much must the firm borrow to achieve the target debt ratio? $273,600 $288,000 $302,400 $317,520 $333,396
Business
1 answer:
sergeinik [125]3 years ago
6 0

Answer:

$288,000

Explanation:

Debt to asset ratio measure the percentage of asset financed by the debt portion. It is also express the percentage of debt in the total capital of the firm.

Total Assets = $720,000

Debt asset ratio = 40%

Debt to Asset ratio = Debt /  Asset

40% = Debt / $720,000

Debt  = $720,000 x 40%

Debt  = $288,000

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The Georgia fair business practices act
7 0
3 years ago
___ are the criteria the firm uses to screen credit applicants in order to determine which of its customers should be offered cr
77julia77 [94]

Answer:

Credit standards

Explanation:

The credit standard refers to the guidelines that are issued by the organization which analyzed whether the borrower is eligible for the loan or not. It could be checked by his or her credit score that reflects the full picture of borrower credit history i.e borrower is paying the amount of loan within in the given time or not or he is a defaulter that helps in deciding whether to offer credit or not and by how much

6 0
3 years ago
Match each of the following terms with their definition - Before-tax cost of debt - Cost of preferred stock - Cost of Common Sto
fomenos

Answer:

Before-tax cost of debt ⇒ A. The interest rate the firm must pay on new long-term borrowing.

This refers to the interest rate that a firm will pay on long term borrowing as compensation to the lenders for lending the company some funds.

Cost of preferred stock ⇒ C. rate of return investors require based on the preferred stock dividend.

The cost of the preferred stock is the rate of the preferred dividend that investors require they are paid every year if dividends can be paid and sometimes even when it cannot.

Cost of Common Stock ⇒ B. the rate of return on retained earnings, and adjusted for flotation costs .

Commons stock costs is the required return on the retained earnings of a company.

WACC ⇒  D. the average cost of raising new financing.

Weighted Average Cost of Capital (WACC) represents the total cost of raising capital for the company as it incorporates the costs of debt, preferred stock and common stock.

3 0
3 years ago
A list of financial statement items for Blossom Company includes the following:
cricket20 [7]

Answer:

Total current assets            $83,580

Explanation:

The preparation of the current assets section of the balance sheet is shown below:

<u>Current Assets                  Amounts </u>

Cash                                   $22,360

Debt investments(short term) $17,360

Accounts receivables     $30,100

Supplies                             $8,170

Prepaid Insurance              $5,590

Total current assets            $83,580

5 0
3 years ago
Hilliard Pharmaceuticals and Ahrens Vitamins, Inc., have high market commonality, both geographically and in the market segments
Mama L [17]

Answer: C. Ahrens will respond aggressively because of the high multimarket contact between Hilliard and Ahrens.

Explanation:

Ahrens will respond aggressively because of the high multimarket contact between Hilliard and Ahrens.

Ahrens Vitamins and Hilliard Pharmaceuticals have high Market commonality. They operate in the same geographical area and their target market is the same, meaning an increase in Profits for Hilliard Pharmaceuticals is a decrease in profits for Ahrens Vitamins, an attack from Hilliard will ave severe consequences for Ahrens Pharmaceuticals as they compete for the same target market.

Ahrens Vitamins will have to respond aggressively to attacks from Hilliard Pharmaceuticals in order to maintain their position in the market  

6 0
3 years ago
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