100%Equity
<span>---------------------------- </span>
<span>EBIT: $200,000 </span>
<span>Interest: $0 </span>
<span>Taxes: ($80,000) </span>
<span>EAT: $120,000 </span>
<span>Equity: $1,000,000 </span>
<span>ROE12.0% </span>
<span>50% Debt </span>
<span>-------------- </span>
<span>EBIT: $200,000 </span>
<span>Interest: ($40,000) </span>
<span>Taxes: ($64,000) </span>
<span>EAT: $96,000 </span>
<span>Equity: $500,000 </span>
<span>ROE: 19.2% </span>
<span>This is my thought and is contingent on interest expense being tax deductible to the corporation. </span>
<span>Under the equity scenario. Taxes are $80,000 or 40% of $200,000 which is 20% of the $1mm asset base. So the $120,000 earnings after tax divided by the $1mm base is 12% </span>
<span>With 50% leverage, you deduct $40,000 (8% of $500,000 financing) and taxes on remaining amount. The new equity base is smaller at $500,000 so the ROE is higher at 19.2%.</span>
Answer: decrease; decrease
Explanation:
Inflation rate is simply defined as the rate at which prices of goods and services rise over time, which therefore results in a decrease in money's purchasing value.
An increase inflation rate for the United States relative to other countries would reduce the US's current account balance, other things equal. An increase growth in the US income level relative to other countries would reduce the US's current account balance, other things equal.
The answer is community college
Answer:
special conditions, special occupancies, capacity requirements, and different charges.
<h3>Where a building or structure is supplied by more than one service?</h3>
- Where a building or structure is supplied by more than one service, or any combination of branch circuits, feeders, and services,
- a permanent plaque or directory shall be installed at each service disconnect location denoting all other services, feeders, and branch circuits supplying that building or structure.
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Answer:
Portfolio Beta = 1.2815
Explanation:
given data
market value = $3,000,000
portfolio beta = 1.6
sells = 25
times index = $10
currently trading = 15379
to find out
anticipates that this hedge will reduce the portfolio beta to
solution
we get number of contract to sell is here
number of contract to sell = Portfolio Beta × ......................1
put here value we get
25 = Portfolio Beta ×
solve it we get
Portfolio Beta = 1.2815