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katrin2010 [14]
3 years ago
12

The use of debt in the firm's capital structure will increase ROE if the firm:_____.

Business
1 answer:
DIA [1.3K]3 years ago
8 0

Answer: c. earns a higher return than the rate paid on debt.

Explanation:

If the debt that the company incurs leads to the company making more money than they are paying as interest for the debt, then more money will be available as net income which would increase the Return on Equity.

ROE is calculated by dividing the Net Income by Shareholder equity. Interest is an expense. If this expense is lower then the increase in net income as a result of the debt then it follows that net income would increase and so would ROE.

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Differentiate between homogeneous mixtures and heterogeneous mixtures ​
vazorg [7]

Answer:

A homogeneous mixture is a solid, liquid or gaseous mixture that has the same proportions of its components throughout any given sample. Conversely, a heterogeneous mixture has components in which proportions vary throughout the sample.

3 0
3 years ago
Roger purchased a stock for $16 a share. The stock paid a $1 annual dividend and increased in price by $2 a year for the followi
Gemiola [76]

Answer:

The answer is 11.2%

Explanation:

Cost of acquisition: $16 per share

Annual dividend: $1

The stock increases by $2 every year for 3 years. Therefore, we have:

First year is $16 per share

Second year is $18 per share

Third year is $20 per share.

The arithmetic average annual capital gain will be

($2/$16 + $2/$18 + $2/$20)/3

(0.125 + 0.111 + 0.1) / 3

0.336/3

0.112

Expressed as a percentage:

= 11.2%

8 0
3 years ago
Write an e-mail to a client describing situations in which the partnership entity form might be more advantageous (or disadvanta
murzikaleks [220]

<u>Explanation:</u>

Structure and Formation of Corporation and Partnership:

  • Corporation is a independent legal entity whereas partnership in which two or more partners share ownership.
  • The formation of partnership entity requires fulfillment of lesser formalities than corporation.

Powers:

  • A partnership entity can do anything which the partners agree to do and there is no limit to the activities.
  • The powers of the shareholders are limited unlike the partnership entity.

Management:

  • Every member of a partnership entity may take part in the management.
  • Shareholders are not involved but managers run the company.
5 0
2 years ago
Araceli is a team member in a large corporation. She never speaks in team meetings because she has seen members talk behind each
Fynjy0 [20]

Answer:

B) Climate of trust

Explanation:

The problem seems to be Climate of trust. This fundamental factor allows teams to perform better than the sum of the performance of each of its members. Through an environment of trust, each member is supported and coached by other team members making individual improvements and increasing synergies within the team. A climate of trust is not exempt from criticism, but this criticism is understood as a helping tool rather than an instrument of personal harm. Finally, a climate of trust allows that errors and mistakes become a useful source of learning.

5 0
3 years ago
easynotrcards Under a fixed exchange rate regime, if the domestic currency is initially undervalued, that is, above par, the cen
Alina [70]

Answer:

D) foreign; domestic

Explanation:

The central Bank can improve the domestic currency by using the reserves. If the domestic currency undervalued the central bank may intervene to sell the Foreign currency and purchase the domestic currency, which will increase the demand of domestic currency and increase the supply of foreign currency in the market which will improve the value of domestic currency and undervalue the foreign currency.

7 0
3 years ago
Read 2 more answers
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