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trapecia [35]
3 years ago
9

When comparing levered vs. unlevered capital structures, leverage works to increase EPS for high levels of operating income beca

use interest payments on the debt (a) vary with EBIT levels. (b) stay fixed, leaving less income to be distributed over fewer shares. (c) stay fixed, leaving less income to be distributed over more shares. (d) stay fixed, leaving more income to be distributed over fewer shares. (e) decrease, leaving more income to be distributed over fewer shares
Business
1 answer:
Leviafan [203]3 years ago
4 0

Answer:

The answer is D.

Explanation:

Unlevered capital structure is the one where there is no debt in the company, the company is completely financed by using equity. While levered capital structure involves the combination of both debt and equity in the company.

For a company, debt is an effective tool to raise funds for expansion without diluting or reducing ownership control by adding more shareholders.

Interest payment on debt is usually fixed.

Going for leverage does not increase the number of shares and Earnings Per Share(EPS) will be higher because earnings or income will be distributed to fewer shareholders unlike unlevered capital structure that tends to add to the number of shares thereby lowering EPS because earnings will be distributed to larger shareholders.

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1. What is the maturity value of P12,500 if it is invested at 15% simple interest for 250 days using ordinary interest?
hram777 [196]

Answer:

$13,784.25

Explanation:

Simple interest = P x R x T

(P12,500 x 15 × 250) / 100 × 365 = $1284.25

Value = $1284.25 + P12,500 = $13,784.25

I hope my answer helps you

8 0
3 years ago
Presented below is information related to Vaughn Company. Cost Retail Beginning inventory $252,960 $281,000 Purchases 1,368,000
viva [34]

Answer:

                               Conventional Retail Method

                                               Cost        Retail      Cost to Retail ratio

Beginning Inventory          252,960    281,000

Add: Net Purchases          1,368,000  2,097,000

Add: Net Markups                                <u>78,000    </u>

                                                              2,456,000

Cost-to-retail Percentage                                        66.00% (1620960/2456000)

Less: Net Markdowns      <u>                  </u>  <u>-32,000    </u>

Goods Available for Sale  1,620,960   2,424,000

Less: Net Sales                                     -<u>2,243,000</u>

Estimated Ending Inventory at Retail <u>$181,000</u>

Estimated Ending Inventory at Cost  = $181,000*66% = $119,460

5 0
3 years ago
Return on assets is computed as net income divided by total assets. true false question. true false
zvonat [6]

The statement, return on assets is computed as net income divided by total assets, is true.

Return on assets (ROA) is a profitability ratio, which measures that how efficiently a company uses the assets it owns to generate profits. If a company wants increase the return on assets then the company tries to increase the profit margin.

So the return on asset of a company is computed by dividing the net income earned by the company by average total assets employed by the company. Thus, it measures how much percentage of profit the company is generating in respect to its assets.

Hence, the higher the percentage of return on assets, the better it is.

To learn more about return on assets here:

brainly.com/question/14969411

#SPJ4

5 0
1 year ago
The Pet Store experienced the following events for the Year 1 accounting period:________.
pogonyaev

Answer:

I used an excel spreadsheet since there is not enough room here

Explanation:

         

Download pdf
6 0
3 years ago
Due to more emphasis on empowerment and more talented and better-educated lower-level management, span of control in organizatio
Firdavs [7]

Answer:

Narrowed

Explanation:

Span of control is the term now used more commonly in business management, particularly human resource management. Span of control refers to the number of subordinates a supervisor has.

Span of control has narrowed as the persons are capable of fullfill the requierements on any specific task without constant supervision

8 0
3 years ago
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