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jolli1 [7]
2 years ago
14

Companies HD and LD have the same total assets, sales, operating costs, and tax rates, and they pay the same interest rate on th

eir debt. Both firms finance using only debt and common equity, and total assets equal total invested capital. However, company HD has a higher total debt to total capital ratio. Which of the following statements is CORRECT?
a. Company HD has a lower equity multiplier.
b. Company HD has more net income.
c. Company HD pays more in taxes.
d. Company HD has a lower ROE.
e. Company HD has a lower times-interest-earned (TIE) ratio
Business
1 answer:
aliina [53]2 years ago
7 0

Answer:

B) Company HD has more net income.

Explanation:

The total debt to capital ratio is calculated by dividing total liabilities by the sum of total shareholders' equity + total debt:

  • debt to capital ratio = total debt / (total debt + total equity)

Since company HD uses more debt to finance its operations, its net income will be lower since it has to pay more interests, but its ROE will be higher since equity is much lower also. Companies that use a lot of financial leverage are more risky but at the same time can generate higher returns to their owners.

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Anthony Finley wishes to become a millionaire. His money market fund has a balance of $287,270 and has a guaranteed interest rat
mrs_skeptik [129]

Answer:

15 years

Explanation:

The target accumulated future amount is the future value of the initial investment(present value), hence, using the future value formula provided below we can determine the investment time horizon in years required to accumulate the target amount:

FV=PV*(1+r)^n

FV=$1,200,000

PV=$287,270

r=10%

n=investment period in years=unknown

$1,200,000=$287,270*(1+10%)^n

$1,200,000/$287,270=(1+10%)^n

$1,200,000/$287,270=(1.10)^n

take log of both sides

ln($1,200,000/$287,270)=n ln(1.10)

n=ln($1,200,000/$287,270)/ln(1.10)

n=15.00years

4 0
2 years ago
50 POINTS
Dmitry_Shevchenko [17]
Nothing will change. Upper management must enthusiastically pursue the plan and create a culture for employees to follow
4 0
2 years ago
What is the most efficient way to adjust the size of the picture?​
Marat540 [252]

Answer:

Our easy-to-use Image Resizer lets you adjust the size of your photos without compromising quality. ... accidentally distort your images, and the fun house look isn't the most flattering for photography. ... The best part, this step is super easy!

Explanation:

7 0
2 years ago
A global recession might limit the benefits of diversifying your investments because:________
Natasha2012 [34]

A global recession might limit the benefits of diversifying your investments because most investments may perform poorly if all countries are in a recession

A prolonged period of worldwide economic contraction is referred to as a global recession. As a result of trade links and international financial systems, economic shocks and the effects of recession spread from one nation to the next, causing more or less synchronized recessions in many national economies.

A decline in global per capita gross domestic product (GDP) is one of the factors the International Monetary Fund (IMF) employs to identify global recessions. The IMF defines this decline in global output as having to occur at the same time as a deterioration of other macroeconomic indices, such as trade, capital flows, and employment.

Learn more about global recession here

brainly.com/question/12483358

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6 0
1 year ago
If the market for corporate control were efficient as a governance device, then only __________ would be targets for takeovers.
CaHeK987 [17]

Answer:

The correct answer is c. poorly performing firms.

Explanation:

Corporate governance is the set of rules, principles and procedures that regulate the structure and operation of the governing bodies of a company. Specifically, it establishes the relationships between the board of directors, the board of directors, the shareholders and the rest of the interested parties, and stipulates the rules governing the decision-making process on the company for the generation of value.

In recent years, and more specifically following the onset of the financial crisis, the international community has understood the importance of listed companies being managed in an adequate and transparent manner. The good governance of companies is the basis for the functioning of markets, as it favors credibility, stability and contributes to boosting growth and wealth generation.

The weakness shown by corporate governments of large organizations in the past has multiplied the demands for transparency, truthfulness, good practices and responsible business behavior on the part of investors, consumers and society in general, which not only pay attention anymore. to financial indicators, but they also want to know how those results have been achieved.

4 0
3 years ago
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