Answer: The answer is D. add non-cash charges to net income.
Explanation: Based on the limited information provided in the question, for indirect cash flows, to evaluate after-tax operating cash flows, you have to add back the non-cash items to net income.
Non-cash items such as depreciation, loss on sale of assets, amortization usually lead to reduction in net income but they are not actual payment to anyone. To arrive at the cash flows from operating activities, these non-cash items have to be added back to the net income to reflect the actual cash operating activities.
Answer:
c
Explanation:
so they know where it came from
Answer:
I think it would be C
(also can u help me with a question? I added it in my page thing)
Answer:
e. 0.34
Explanation:
Let debt be $D
Equity be $E
Total=(D+E)
WACC = Respective cost * Respective weight
12.7 = {(D*4.8)/(D+E)} + {(15.4*E)/(D+E)}
12.7*(D+E)=4.8D+15.4E
12.7D+12.7E=4.8D+15.4E
D=(15.4-12.7)E /(12.7-4.8)
D = 2.7E / 7.9
D = 0.0341772
D = 0.34 E
Hence, debt-equity ratio=debt/equity
=0.34
Answer:
14.5%
Explanation:
The computation of the expected return on stock A is shown below:
Given that
The expected return of stock b = 12%
beta = 1.2
Now
risk free rate = 2% market risk premium
So as per CAPM, the expected return = risk free rate + beta × market risk premium
0.12 = 0.02 + 1.2 × market risk premium
1.2 × market risk premium = 0.10
So,
market risk premium is
= 0.10 ÷ 1.2
= 0.0833 or 8.33%
Since they have equal risk reward so the market risk premium would be same for stock A
Now
The expected return of stock A is
= 2% + (1.5 × 8.33)
= 14.5%