Answer: d.have adequate protection against a potential drop in earnings jeopardizing their interest payments
Explanation:
The Times Interest Earned Ratio is a measure that allows for the analysis of if a company can keep up it's debt payments.
It is calculated by dividing the Earnings before Interest and Tax by the Interest Expense of the debt.
The higher the number, the better because it means that they can keep up debt payments several times over.
As Debtors therefore, this figure is important because missing a debt payment is very bad for credit ratings and this matrix helps them realise if they can keep paying for debt even if their Earnings drop.
Answer:
$98 million
Explanation:
Kneeman markup company has a total debt obligation with a book value of $30 million
The market value is $28 million
The total equity has a book value of $20 million and a market value of $70
Therefore, the price that you should be willing today can be calculated as follows
Debt obligation market value+total equity market value
= $28 million + $70 million
= $98 million
Hence the amount that you should be willing to pay today is $98 million
Answer:
D.
Explanation:
A treasury note is a form of currency that needs to get paid back with interest at a certain date.
Treasury notes, also known as T-notes, are issued by the US treasury. It earns a fixed interest rate every six months till it gets matured. The treasury notes get issued in terms of 2, 3, 5, 7, and 10 years. By issuing the treasury notes, the US government partially funds itself.
A treasury note is a promissory note that is to be paid back with interest.
Therefore, option D is correct.
Answer:
Option A, buys dollars to raise the exchange rate, is the right answer.
Explanation:
Option A is correct because when the Fed will buy the dollars then only the demand for dollars will shift rightwards. Consequently, the dollar price or exchange rate will go up. Therefore, the Fed will buy the dollars to increase the exchange rate. In another case, if the Fed wants to decrease the exchange rate then it will sell the dollars, and selling of dollars will shift the supply rightwards. Thus, the exchange rate will fall.
Answer:
The number of new shares that will be issued is 3,000 shares.
Explanation:
A stock dividend can be desctibed as dividend that paid to shareholders in shares instead of paying it in cash to the shaeholders.
From the question, we are given the following:
Number of shares outstanding = 30,000
Planned stock dividend percentage = 10%
Therefore, the number of new shares that will be issued as stock dividend to the shareeholders of Storico can be calculated as follows:
Number of new shares to issue = Number of shares outstanding * Planned stock dividend percentage = 30,000 * 10% = 3,000
Therefore, the number of new shares that will be issued is 3,000 shares.