When the firm cuts its dividend ratio, the earnings retention ratio will increase.
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Explanation:
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The retention ratio is the extent of profit held back in the business as held income. It is something contrary to the payout proportion, which gauges the level of benefit delivered out to investors as profits.
The maintenance proportion is additionally called the plowback proportion. Held benefit is the benefit stayed within the instead of paid out to investors as a profit. Held benefit is broadly viewed as the most significant long haul wellspring of fund for a business
.
Answer:
A 2-column table with 4 rows. Column 1 is labeled Assets with entries car, home, savings bond, stocks. Column 2 is labeled Liabilities with entries leased car, mortgaged home, credit card debt, tax bill.
Explanation:
An asset is a valuable item that a person or a corporation owns. An asset has an economic or monetary value attached to it. It is a resource used in generating future benefits, save costs, or produce goods and services. From the list provided, a car, home, savings bond, stocks represent assets.
Liabilities are things or money owed. They are debts or obligations to be met. A mortgage is a debt; hence it is a liability. A leased car belongs to someone else and presents an obligation to pay, making it a liability. The tax bill is a debt.
Answer:
Expected return = 21.9
%
Explanation:
<em>The capital asset pricing model is a risk-based model. Here, the return on equity is dependent on the level of reaction of the the equity to changes in the return on a market portfolio. These changes are captured as systematic risk. The magnitude by which a stock is affected by systematic risk is measured by beta</em>.
Under CAPM, Ke= Rf + β(Rm-Rf)
Rf-risk-free rate (long-term i.e 10 year treasury bill rate), β= Beta, Rm= Return on market., Ke- Return on equity (cost of equity)
This model can be used to work out the cost of equity as follows:
Ke= Rf + β (Rm-Rf)
Rf- 5%, β= 1.3, Rm- 18, E(r)- ?
Ke = 5% + 1.3×(18-5)%=21.9
%
Ke = 21.9
%
Expected return = 21.9
%
Answer:
Marigold Corp.
The amount received from Bramble is $4,508.
Explanation:
a) Computation of Amount Received:
Jan. 15 Sales = $5,700
Jan. 20 Returns (1,100)
Balance due $4,600
Jan. 24 discount ($92)
Cash collected $4,508
b) Discount allowed = 2% of $4,600 = $92
c) This is in accordance with the trade terms 2/10, n/30, which allows a cash discount of 2% if payment was made within 10 days from the date of purchase, with the last allowed credit within one month. From January 15 to January 24 is 10 days. So, the cash discount of 2% applies on the balance due after the sales returns.
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