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photoshop1234 [79]
3 years ago
15

Financial leverage: Group of answer choices is the ratio of a firm's revenues to its fixed expenses. is equal to the market valu

e of a firm divided by the firm's book value. increases the potential return to the stockholders. is inversely related to the level of debt. increases as the net working capital increases.
Business
1 answer:
Rainbow [258]3 years ago
7 0

Answer: Increases the potential return to the stockholders.

Explanation:

Financial Leverage is the use of more debt to fund company assets. This can lead to higher potential returns to the Stockholders if the interest rate attached to the debt is less than the Company's required rate of return. That way, the difference between the rates will bring about a positive return for shareholders.

Also, having more debt provides a sort of tax shield to the earnings of the Stockholders because Debt is Tax Deductible. This will therefore increase the earnings going to the Stockholders.

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2 years ago
Assume that Jack and Hal and Sophia enter into a valid contract for the sale of the restaurant and for the covenant not to compe
trasher [3.6K]

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3) Jack has anticipatorily repudiated the contract and Hal and Sophia can immediately consider the contract to be breached.

Explanation:

Anticipatory repudiation of a contract refers to one party breaching the contract by declaring that they do not intend to perform consideration. Anticipatory repudiation is a type of contract breach, and as soon as the other party is notified about it, it can decide to claim any type of compensatory damages that may result from the breaching.

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3 years ago
Pick the correct statement related to bid price from below. Multiple Choice The bid price is the price you must charge to break
statuscvo [17]

Answer:

The bid price is the minimum price that will provide your target rate of return.

Explanation:

A market maker also known as a liquidity provider refers to an individual or business firm who is saddled with the responsibility of quoting a buy or sell price for a commodity with the hope of making profit on the ask-bid price.

The bid-ask spread refers to the amount by which the bid price by a dealer is lower than the ask-price for a security or an asset in the market at a specific period of time.

The bid-ask spread exists because of the need for dealers to cover expenses and make a profit. Thus, a bid-ask spread is use in the transaction of the following items; options, future contracts, stocks, and currency pairs.

Hence, the bid-ask spread is simply the difference between the ask price and the bid price. Therefore, a bid-ask spread is a measure of the demand and supply for an asset; where demand represents the bid while supply represents the ask for an asset.

In the trading of a security, a dealer who is willing to sell an asset or securities would receive a bid price while the price at which the dealer is willing to sell his asset to another dealer (buyer) is the ask price.

A bid price can be defined as the amount of money (price) at which a market-maker (dealer) is willing to buy securities, commodities, or other assets.

This ultimately implies that, the bid price is the minimum price that will provide your target rate of return because it is the highest price a buyer is willing to pay to a market-maker (dealer) selling securities, commodities, or other assets.

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3 years ago
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