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Sidana [21]
3 years ago
13

Hutchinson Corporation has zero debt - it is financed only with common equity. Its total assets are $330,000. The new CFO wants

to employ enough debt to bring the debt/assets ratio to 40%, using the proceeds from the borrowing to buy back common stock at its book value. How much must the firm borrow to achieve the target debt ratio?Select the correct answer.a. $132,000.00 b. $131,986.90 c. $131,973.80 d. $131,960.70 e. $132,013.10
Business
1 answer:
Taya2010 [7]3 years ago
6 0

Answer:

firm must borrow $132,000 to achieve the target debt ratio

correct option is a. $132,000.00

Explanation:

given data

Total Assets = $330,000

Desired Debt/Assets Ratio = 40%

to find out

firm borrow to achieve the target debt ratio

solution

we get here funds to be borrowed through debt

Value of Debt = Total Assets × Desired Debt/Assets Ratio   ...........1

put here value we get  

Value of Debt = $330,000  × 40%

Value of Debt = $132,000

so that we can say firm must borrow $132,000 to achieve the target debt ratio

correct option is a. $132,000.00

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What was President Bush's response to the financial crisis?
Tasya [4]

Answer:

The answer is e. to support a federal bailout of the banking industry

Explanation:

To response to financial crisis, President Bush had addressed in the public television that the federal bailout of damaged financial institutions was necessary to avoid long and painful recession.

In fact, his administration had implemented an $700 billion worth of Trouble Asset Relief Program since October 2008, in which the amount from federal government's budget was spent on bailout damaged financial institutions such as American International Group (AIG), and bad mortgage debts.

So, e is the correct choice.

7 0
2 years ago
In a word document, conduct a cost-benefit analysis where you write all of the costs (monetary and non-monetary) and compare the
sineoko [7]

It should be noted that cost-benefit analysis is the way to compare the costs and benefits of a project expressed in monetary units.

<h3>What Is a Cost-Benefit Analysis?</h3>

A cost-benefit analysis is the systematic process which businesses use on order to analyze which decisions to make and the ones that will be forgo. The cost-benefit analyst simply sums the potential rewards that are expected from a situation and then subtracts the total costs that are associated with taking that action.

The major steps in a cost-benefit analysis

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  • Identify the impacts and select measurement indicators.
  • Predict the impacts over the life of the proposed regulation.
  • Monetize and place dollar values on impacts.

Before the class goes on a field trip to Walt Disney World in Orlando, it's important to conduct a cost-benefit analysis that will be used to evaluate all the potential costs and the revenues which the class might generate from the project.

Then, the outcome that is gotten from the analysis will determine whether the project will be financially feasible or whether the company can pursue another project.

Learn more about cost-benefit analysis on:

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7 0
2 years ago
What is the purpose of the 1040 series of tax forms?
melamori03 [73]
It is the standard (IRS) form that individuals use to file their annual  income tax returns
6 0
3 years ago
Read 2 more answers
During the past year, a company had cash flow to creditors, an operating cash flow, and net capital spending of $30,026, $67,603
larisa86 [58]

Answer: $6,834

Explanation:

Given the following ;

Cash flow to creditors = $30,026

Operating Cashflow = $67,603

Net capital spending = $28,760

Beginning net working capital = $11,917

Ending working capital = $13,900

Therefore,

Net working capital = Ending working capital - beginning working capital

Net working capital = $(13,900 - 11,917) = $1,983

Cashflow from asset = (operating Cashflow - Net capital spending - net working capital)

Cashflow from asset = $67,603 - $28,760 - $1,983 = $36,860

Therefore,

Company's Cashflow to stockholders during the year = (Cashflow from asset - Cashflow to creditors)

$36,860 - $30,026 = $6,834

6 0
2 years ago
Radford is a small company that manufactures automobile bearings. Managers at the company must make decisions on the kind and th
Lynna [10]

Answer:

a. corporate finance

Explanation:

Corporate finance -

It refers to the financial area , which is expertise in the source of funding , is referred to as corporate funding.  

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Hence , from the given scenario of the question,  

The correct option is a. corporate finance .

8 0
3 years ago
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