Answer:
The correct answer is letter "A": The terms of a bond issue to fund a project.
Explanation:
Capital structure is the mixture of a company's debt and equity to fund its long-term operations and growth. Common stock is the most common type of capital for publicly traded companies, which typically forms the majority of a company's stock ownership. Bonds are another firm companies raises funds from under a repayment promissory note. Capital structure helps investors to assess the optimal value of a firm's capital expense.
Hey there,
Answer:
<span>Change from higher-risks to lower-risks investments
Hope this helps :D
<em>~Top</em>
</span>
Answer:
A. Selection of the appropriate causal variable Y is important
Explanation:
We have this function, Y = f(X).
From this function we can see that Y is dependent on X. That is, it is a function of X. Y is not a causal variable. A causal variable is a variable that is able to influence the variable of interest. From this question Y is the variable of interest. It is the dependent variable. The independent variable is X and it is the causal variable.
Therefore the incorrect one is Selection of the appropriate causal variable Y is important
Answer:
8
Explanation:
Data provided in the question:
The market capitalization rate on the stock = 14%
Expected ROE = 15%
Expected EPS = $56
Firm's plowback ratio = 60%
Based on the above information
The computation of the P/E ratio is shown below
But before that, we need to do the following calculations
As we know that
Payout ratio = (1 - plowback ratio )
= (1 - 0.6 )
= 0.4
Now
Growth rate = ROE × Retention ratio
= 0.15 × 0.60
= 9%
And,
Dividend for next period i.e D1 is
= EPS × Payout ratio
= $6 × 0.4
= $2
.4
So,
Current price = D1 ÷ ( Market capitalization rate - Growth rate )
= $2.4 ÷ ( 0.14 - 0.09 )
= $48
And, finally
P/E ratio is
= (Current price) ÷ (EPS)
= $48 ÷ $6
= 8
