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3 years ago

How does a company measure profit growth?

Business

1 answer:

tankabanditka [31]3 years ago

4 0

Answer:

a. by finding the percentage increase in net profits over time

Explanation:

The primary reason why companies engage in business is to make profit. When profits are made, that means there will be opportunity for expansion. A company that does not make profit will not expand hence the possibility of its survival will not exist.

Companies make profit to finance business operation, purchase critical assets etc. Companies measure their profit growth to know how well their profit increase overtime and it is measured by finding the percentage increase in net profits overtime.

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What is true regarding long-term and short-term bonds (assume they have the same par value and coupon rate)?

Alex

Option C stating long term bonds have higher reinvestment risk is true

This is because the long-term bonds have higher interest rates which lead to higher coupon amounts which further leads to an increase in reinvestment value resulting in higher reinvestment risk

The answer to the second question is. TRUE

The answer to the third question is FALSE

The prices of high coupon rate bonds tend to be less sensitive to a given change in interest rate.

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<em>Your question is incomplete. please read below to find the full content.</em>

What is TRUE regarding long-term and short-term bonds (assume they have the same par value and coupon rate)?

Long-term bonds have lower interest rate risk.

Short-term bonds have a higher reinvestment risk.

Long-term bonds have a higher reinvestment risk.

Short-term bonds have higher interest rate risk.

There is an inverse relationship between bonds' quality ratings and their required rates of return. Thus, the required return is lowest for AAA-rated bonds, and required returns decrease as the bond ratings get higher.

True

False

The prices of high-coupon bonds tend to be more sensitive to a given change in interest rates than low-coupon bonds, other things held constant.

True

False

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7 0

2 years ago

Sheldon, Inc. declared a stock dividend of 50,000 shares on a date when the company's common stock was selling for $ 18 per sh

Ymorist [56]

Answer:

As a result of this stock dividend, Sheldon's common stock will increase by $900,000, the additional paid in capital will not change, and the retained earnings will decrease by $900,000

Explanation:

Stock dividend is paying dividends by issuing additional stocks to shareholders.

In this case,50,000 shares were issued instead of paying cash dividends.

The stock dividend is financed from retained earnings and the amount involved is $900,000(50000*$18).

However,common stock would witness an increase of $900,000 by a way of credit and retained earnings would reduce by the same amount with no impact in the paid in capital in excess of par since the par value of the stock was not provided,hence it is no par value stock.

8 0

3 years ago

In a short essay What are advantages and disadvantages of competition for buyers and sellers?

DochEvi [55]

Answer:

Competition decreases your market share and shrinks your customer base, especially if demand for your products or services is limited from the start. A competitive market can also force you to lower your prices to stay competitive, decreasing your return on each item you produce and sell.

4 0

3 years ago

The zero coupon bonds of JK Industries have a market price of $211.16, a face value of $1,000, and a yield to maturity of 7.39 p

Nutka1998 [239]

Answer:

It will take about 22 years until the bonds mature.

Explanation:

This can calculated as follows:

BP = FV/(1 + r)^n ..................................... (1)

Where;

BP = Bond price = $211.16

FV = Face value of $1,000

r = Yield to maturity = 7.39%, or 0.0739

n = number of years for the bond to mature = ?

Substituting the values into equation (1) we have:

211.16 = 1,000/(1 + 0.0739)^n

211.16 [(1.0739)^n] = 1,000

(1.0739)^n = 1,000/211.16

(1.0739)^n = 4.73574540632696

Log-linearizing the above, we have:

nln (1.0739) = ln(4.73574540632696)

n = ln(4.73574540632696)/ln (1.0739)

= 1.55513913902672/0.0712968818820338

= 21.8121620185272

n = 22 years approximately

Therefore, it will take about 22 years until the bonds mature.

4 0

4 years ago

What should investors consider when planning for their retirement?

Annette [7]

Retirement planning should include determining time horizons, estimating expenses, calculating required after-tax returns, assessing risk tolerance, and doing estate planning. Start planning for retirement as soon as you can to take advantage of the power of compounding.

Planning for retirement is making preparations for your future so that you can continue to achieve all of your objectives and desires on your own. Setting your retirement goals, calculating how much money you will require, and making investments to increase your retirement savings are all included in this. Every retirement strategy is different.

Planning for retirement is crucial because it might prevent you from running out of money in later life. Your strategy can assist you in determining the rate of return you require on your assets, the appropriate level of risk, and the maximum amount of income you can safely draw from your portfolio.

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5 0

2 years ago