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worty [1.4K]
3 years ago
9

Shoe Box Stores is currently an all-equity firm with 25,000 shares of stock outstanding. Management is considering changing the

capital structure to 35 percent debt. The interest rate on the debt would be 8 percent. Ignore taxes. Jamie owns 600 shares of Shoe Box Stores stock that is priced at $22 a share. What should Jamie do if she prefers the all-equity structure but Shoe Box Stores adopts the new capital structure?
Business
1 answer:
notka56 [123]3 years ago
8 0

Answer: d. Sell 210 shares and loan out the proceeds at 8 percent

Explanation:

Because the Firm wants to use a Debt to Equity Capital structure instead of an All Equity structure, she can lend money out at the company interest rate to NEGATE the conversion.

She can do this by selling 35% of her portfolio and loaning it out at 8%

35 % of her Portfolio would be,

= 0.35 * 600

= 210 shares

So she can sell 210 shares and loan at the proceeds at 8% to offset the Company's conversion

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Wally owns 200 acres of land.Wally offers to sell the land to Robert for $1,500 per acre.Robert replies that he does not need 20
stiv31 [10]

Answer:

D) Wally wins; this agreement is too indefinite since it does not identify which 40 acres are to be sold.

Explanation:

Since in the given situation, wally agrees to sell but here the identification of the land is not mentioned i.e. 40 acres and at the later time the wally refused to sold any land so here wally should wins as the agreement is not definite which type of the land should be sold so it becomes the agreement void

Hence, the correct option is d.

8 0
3 years ago
The price of a ranchette estate is $260,000. The bank requires a 15% down payment and 3 points at the time of closing. The cost
coldgirl [10]

Answer:

Missing word<em> "and the cost of one point at the time of closing"</em>

<em />

Down payment = $260,000*15%

Down payment = $260,000*0.15

Down payment = $39,000

Amount of mortgage = $260,000 - $39,000

Amount of mortgage = $221,000

Cost of 3 point at the time of closing = 3% of amount of mortgage

Cost of 3 point at the time of closing = 3% * $221,000

Cost of 3 point at the time of closing = $6,630

8 0
2 years ago
A customer buys shares of a stock that had its initial public offering 5 years ago. Which statement is TRUE regarding prospectus
Luda [366]

Answer:

A prospectus is not required because the initial public offering happened 5 years ago

Explanation:

A prospectus is a legal document which is to be filled by Securities and Exchange Commission (SEC) that reflects the details with respect to the investment offering to the public in terms of stocks, bond, mutual funds, etc

On the other hand the initial public offering is the offering done by the company for the first time to the public related to the investment

Since in the question it is mentioned that the customer purchased the shares of stock but its initial public offering is done 5 years ago so no prospectus is required

3 0
3 years ago
14.Outline four features that constitutes a market <br>​
ICE Princess25 [194]

Answer:

as

Explanation:

8 0
2 years ago
In a perfectly competitive industry, influence over price is exerted by
tigry1 [53]

Answer:

(C) the forces of supply and demand

Explanation:

In a perfectly competitive industry, no single buyer nor seller will be able to influence prices thus marking the forces of demand and supply (the invisible hand) the determinant of pricing. Each buyer or seller will only account for a minute portion of total demand and supply thus making their influence of market price insignificant.

Options (A), (B) and (D) are incorrect as the largest firms, individual sellers and individual buyers do not influence pricing over price in a perfectly competitive market.

8 0
3 years ago
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