1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Valentin [98]
2 years ago
14

Klein Cosmetics has a profit margin of 5.0%, a total assets turnover ratio of 1.5 times, a zero debt ratio and therefore an equi

ty multiplier of 1.0, and an ROE of 7.5%. The CFO recommends that the firm borrow money, use it to buy back stock, and raise the debt ratio to 50% and the equity multiplier to 2.0. She thinks that operations would not be affected, but interest on the new debt would lower the profit margin to 4.5%. This would probably be a good move, as it would increase the ROE from 7.5% to 13.5%.
Business
1 answer:
arsen [322]2 years ago
3 0

It is true that this change would probably be a good move, as it would increase the ROE from 7.5% to 13.5%.

<u>Explanation:</u>

Equity multiplier is calculated by dividing the total assets of a company to shareholder’s equity of an organization. If a company has not raised any debt, then such company would be having equity multiplier equal to 1. t is a leverage ratio.

Return on equity is another financial measure to calculate the return. It is calculated by dividing the net income of a company to the shareholder’s equity. It directly shows the amount that a company is earning on its money invested by the equity shareholders.

You might be interested in
As the chief financial officer (CFO), you identify that your firm needs to raise additional funds by selling new shares of stock
const2013 [10]

Answer:A) an investment banker

Explanation: An investment banker is an individual who often works as part of a financial institution and is primarily concerned with raising capital for corporations, governments, or other entities.

3 0
3 years ago
Shen manages a grocery store in a country experiencing a high rate of inflation. He is paid in cash twice per month. On payday,
IRINA_888 [86]

Answer:

The correct answer is option b.

Explanation:

Shen is working in a country where the inflation rate is high.  

He gets a salary every two weeks.  

After receiving his salary he immediately goes out and buys all the goods he is going to need over the next two weeks.  

He converts the remaining salary in a more stable currency.  

He does this in order to prevent his salary from losing purchasing power.  

This effort that he is making to prevent his real income from losing value is called the shoe-leather cost of inflation.  

The shoe-leather cost can be defined as the cost of time and effort made to prevent the cash holdings from losing their value.

3 0
3 years ago
What is a online profile?<br> 20 pts!!
velikii [3]
Online profiling is collecting information about Internet users and their online behavior to create a profile of their tastes, interests, and purchasing habits.
8 0
3 years ago
Fishing Adventures rents small fishing boats to tourists for day­long fishing trips. Each boat can only carry 1500 pounds of peo
galben [10]

Answer:

Who want to rent a boat? 8 person

Explanation:

Carry  1500 pounds    

Carry  200 pouns      

Average  150 pound /person    

Additional10 pounds/person    

     

1500-200=150x +10x

         1300=160x    

        x=1300÷160    

        x=8,12  

 8 person Aditional Gear  

 150          10  

 8           8  

 1200 80            200 1480

8 0
3 years ago
Nora contracts to work for ABC Investments during June for $2,500. On May 31, ABC cancels the contract. Nora refuses to accept a
kap26 [50]

Answer:

c. $500

Explanation:

A contract is an agreement by two or more parties to perform a.certain activity within a given time.

When contract are breached, the beneficiary has the right to gain back the amount promised.

If the beneficiary can get another option, the other party is obligated to pay the balance.

On this instance Nora had the chance to get a new job at $2,000 salary the balance is $2,500 - $2,000= $500. Since she rejected the job she is responsible for that loss.

However ABC is still liable to pay the balance of $500

6 0
3 years ago
Other questions:
  • Team operating principles are sometimes included in a project charter to enhance team performance. Which of the following statem
    11·2 answers
  • How do you juggle being a student and being an entrepreneur?
    15·1 answer
  • With respect to marketing planning, the type of plan that tends to be very detailed in nature and typically covers a year or les
    9·1 answer
  • Explain what a debit memorandum is by completing the following sentence.When a buyer returns or takes an allowance on merchandis
    13·1 answer
  • You and spouse are filing a joint return. Your current deductions have reduced your taxable income to​ $88,990, bringing you int
    10·2 answers
  • A company's overall ability to execute is a function of effectively executing according to three processes, but bossidy and char
    14·1 answer
  • The owner of an Italian restaurant has just been notified by her landlord that the monthly lease on the building in which the re
    7·1 answer
  • All of the following are parts of business models employed in the online music industry except: Question 2 options: A) peer-to-p
    5·1 answer
  • A class of stock for which there is no minimum legal capital is called?
    7·1 answer
  • Which of the following statements regarding culture and government is true? Multiple Choice In the United States, there is a clo
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!