The fraud at healthsouth at the structural level of the company was more intense because checks and balances were eliminated and organizational culture was compromised
The HealthSouth fraud took place in an intriguing time of economic expansion and lax laws, which made accounting fraud considerably simpler. Investors and lenders were more concerned with revenue in the 1990s than they were with profitability. Growth was important when a company was asking for funding. CEOs were under pressure, including Scrushy, to maintain company growth and consistently above analyst predictions. Along with this increased demand for growth, there emerged an odd legal climate.
The HealthSouth CFOs (described as: filling "holes" in the balance sheet with "dirt") changed their earnings figures. The fraud went unnoticed until 2003, when Weston Smith, a former HealthSouth CFO, told federal authorities about it. It involved inappropriately capitalizing spending, overestimating insurance reimbursements, overvaluing fixed assets, and employing flawed reserve accounting.
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Answer:
0.097 OR 9.7%
Explanation:
Cost of Equity using CAPM-
Re = Rf + Beta (Rpm)
where,
Rf = Risk free return = 6%,
Rpm = Risk premium = 4%,
Beta = 0.9
Therefore,
Re = .06 + .9 (.04)
= 9.6%
Unlevered cost of equity:
ReU = Wd × rd + We × re
where,
ReU = Unlevered cost of equity,
Wd = Debt = 20%
rd = cost of debt = 8%
We = equity = 80%
re = cost of equity = 9.6%
Therefore,
ReU = 0.20 × 8% + .80 × 9.6%
= 9.28%
Levered cost of Equity:
New Debt = 60%,
New Equity = 40%,
New rd = 9%
ReL = ReU + (ReU - rd) (D ÷ E)
= 9.28% + (9.28% - 9%) (0.60 ÷ 0.40)
= 0.097 OR 9.7%
The enterprise systems improves the managers and companies performance by Integrating an internal business processes and link to external business partners.
<h3>What is an
enterprise planning resources?</h3>
This resource planning refers to the management and integration of business processes through a single system.
Hence, the systems improves the managers and companies performance by Integrating an internal business processes and link to external business partners.
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Trade between nations can be mutually beneficial if one country has a comparative advantage.
<h3>
What do you mean by a comparative advantage?</h3>
The model of comparative advantage is one of the basic concepts that underlies the theory of international trade and shows that countries tend to specialize in the production and export of those goods that they manufacture at a relatively lower cost than the rest of the world.
Those that are comparatively more efficient than others and that tend to import goods in which they are more inefficient and therefore produce with costs that are comparatively higher than the rest of the world.
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