Answer:
B. Suppose a firm wants to maintain a specific TIE ratio. It knows the amount of its debt, the interest rate on that debt, the applicable tax rate, and its operating costs. With this information, the firm can calculate the amount of sales required to achieve its target TIE ratio.
Explanation:
The times interest earned (TIE) ratio measures the company's ability to meet its debt obligations from its current income. The formula for calculating TIE number is 'earnings before interest and taxes (EBIT) divided by the total interest payable on all debts.
With the above definition and formula in mind it becomes <u>true</u> that if a firm wants to maintain a specific TIE ratio, If it knows the amount of its debt, the interest rate on that debt, the applicable tax rate, and its operating costs. With this information, the firm can calculate the amount of sales required to achieve its target TIE ratio, because;
With the parameters 'If it knows the amount of its debt, the interest rate on that debt,' It will work out total interest on all debts which is the denominator of TIE.
AND
With the parameters 'the applicable tax rate, and its operating costs' it will work out the Earnings Before Interest and Taxes'
Based on the information given the annual interest payments amount to:$800.
<h3>Annual interest payments:</h3>
The 10M represent 1-1,000 bonds which is $10,000
Using this formula
Annual interest payment= Interest rate annually×Bonds
Where:
Interest rate annually=8%
Bonds=$10,000
Let plug in the formula
Annual interest payment=8% of $10,000
Annual interest payment=$800
Inconclusion the annual interest payments amount to:$800.
Learn more about annual interest payment here:brainly.com/question/2151013
Answer:
A) the marginal buyer's willingness to pay for the 100th unit of the good is $25.
Explanation:
Microeconomics basically works on the margin, it studies marginal costs, marginal revenue, marginal prices, marginal demand, marginal supply, etc. The margin measures the effect of one additional unit: either sold, consumed, produced, etc.
In this case, the marginal price of the 100th unit of the good is $25, that means that a buyer (you can call him a marginal buyer) will be willing and able to pay $25 for that specific unit of the good.
That doesn't mean that the price of the good is constant, both the supply and demand of goods are curves, because the marginal demand constantly changes depending on the marginal price and the marginal utility produced by consuming the extra unit of the good. On the other hand, the marginal changes depending on the marginal costs of producing that good, and the marginal revenue expected to be earned by selling that additional unit.
Answer:
D) Beta .98 expected return .107
Explanation:
In CAPM (Capital Asset Pricing Model), expected return = risk-free rate + Beta * market risk premium = 3.4% + Beta * 7.4%
We try every choice consecutively
A) Beta .87 expected return .096
⇒ expected return = 3.4% + 0.87 * 7.4% = 0.098
A is wrong
B) Beta 1.09 expected return .102
⇒ expected return = 3.4% + 1.09 * 7.4% = 0.1147
B is wrong
C) Beta 1.62 expected return .146
⇒ expected return = 3.4% + 1.62 * 7.4% = 0.154
C is wrong
D) Beta .98 expected return .107
⇒ expected return = 3.4% + 0.98 * 7.4% = 0.107
D is TRUE
E) Beta 1.16 expected return .139
⇒ expected return = 3.4% + 1.16* 7.4% = 0.12
E is wrong
Answer:
C. increase in modernization by new investors.
Explanation:
Privatization is the transfer of ownership of property or business owned by government to a private entity.
Privatization generates capital to be invested in strategic areas and help to reduce the continuing drain on future natural resources. The new private investors causes economic growth by modernizing the acquired property or business from the government.
