Cheap steel, Henry Bessemer invented a way to sell and make steel for a cheaper price.
This was helpful enough to make other things for a cheaper price because of how cheap steel was
Answer:
At the end of year 4 (one year before the first cash flow)
Explanation:
According to the present value of perpetuity concept here we divided the predicted cash flows by the rate of that period by calculating this it provides the present value that is prior to the cash flow now if we want for more years so we should have to discount over that time period
Since in the given situation the starting of the cash flows is from the ending of year 5 therefore the timeline would be at the closing of year 4 i..e one year prior to the first cash flow
Answer:
a. Suppose GP issues $ 100$100 million of new stock to buy back the debt. What is the expected return of the stock after this transaction?
b. Suppose instead GP issues $ 50.00$50.00 million of new debt to repurchase stock. i. If the risk of the debt does not change, what is the expected return of the stock after this transaction?
ii. If the risk of the debt increases, would the expected return of the stock be higher or lower than when debt is issued to repurchase stock in part (i)?
- If the risk of the debt increases, then the cost of the debt will increase. Therefore, the company will need to spend more money paying the interests related to the new debt which would decrease the ROE compared to the 18% of (i). Since we do not know the new cost of the debt, we cannot know exactly by how much it will affect the ROE, but I assume it will still be higher than the previous ROE.
Explanation:
common stock $200 million
total debt $100 million
required rate of return 15%
cost of debt 6%
current profits = ($200 million x 15%) + ($100 x 6%) = $30 million + $6 million = $36 million
if equity increases to $300 million, ROI = 36/300 = 12
if instead new debt is issued at 6%:
equity 150 million, debt 150 million
cost of debt = 150 million x 6% = $9 million
remaining profits = $36 - $9 = $27 million
ROI = 27/150 = 18%
Answer:
Both microeconomics and macroeconomics involve examining economic behavior, but they differ in terms of the scale of the subjects being studied.
Explanation:
Microeconomics is the field of economics that looks at the economic behaviors of individuals, households, and companies. Macroeconomics takes a wider view and looks at the economies on a much larger scale—regional, national, continental, or even global. Microeconomics and macroeconomics are both vast areas of study in their own rights.
<span>the answers is 2,4,5,6</span>
