Answer:
d. Tax impact x Capital structure impact x EBIT / Sales
Explanation:
The net profit margin ratio could be computed by dividing the net income from the sales and the net income is come when the expenses are deducted from revenues
Also the capital structure is the combination of equity, preferred stock, debt.
So mainly it is broken into tax impact, capital structure impact and net profit margin ratio
Therefore the option d is correct
Answer:
a. Suppose GP issues $ 100$100 million of new stock to buy back the debt. What is the expected return of the stock after this transaction?
b. Suppose instead GP issues $ 50.00$50.00 million of new debt to repurchase stock. i. If the risk of the debt does not change, what is the expected return of the stock after this transaction?
ii. If the risk of the debt increases, would the expected return of the stock be higher or lower than when debt is issued to repurchase stock in part (i)?
- If the risk of the debt increases, then the cost of the debt will increase. Therefore, the company will need to spend more money paying the interests related to the new debt which would decrease the ROE compared to the 18% of (i). Since we do not know the new cost of the debt, we cannot know exactly by how much it will affect the ROE, but I assume it will still be higher than the previous ROE.
Explanation:
common stock $200 million
total debt $100 million
required rate of return 15%
cost of debt 6%
current profits = ($200 million x 15%) + ($100 x 6%) = $30 million + $6 million = $36 million
if equity increases to $300 million, ROI = 36/300 = 12
if instead new debt is issued at 6%:
equity 150 million, debt 150 million
cost of debt = 150 million x 6% = $9 million
remaining profits = $36 - $9 = $27 million
ROI = 27/150 = 18%
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Answer:
Customize reports
Review recurring transactions
Set up and implement an online bill pay service
Explanation:
Considering the situation described above, after converting to QuickBooks Online, the 3 setup and customization steps that are appropriate for this client are the following:
1. Customize reports: this includes forms and reports and, if possible to memorize reports.
2. Review recurring transactions: this is to restore desktop QuickBooks memorized transactions.
3. Set up and implement an online bill pay service: this is done either through Intuit Online Payroll or QBOP.
Answer:
The correct answer is $151 per share.
Explanation:
According to the scenario, the computation of the given data are as follows:
Currently selling price = $151 per share
So, we can calculate the Current market value by using following formula:
Current market value (price) of stock = Currently selling price of stock
As, Currently selling price of stock is already given.
Than, Current market value (price) of stock = $151 per share.