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maw [93]
3 years ago
11

If MM's proposition II without taxes is true, what is the return to investors who invest $20 in a stock, borrow another $20 to b

uy a share of stock and pay 6% on the borrowed money if the EPS is $1.50?
a. 6.0%.
b. 9.0%.
c. 12.0%.
d. 15.0%.
Business
1 answer:
PilotLPTM [1.2K]3 years ago
7 0

Answer:

b. 9.0%.

Explanation:

The computation of the return on the investment is shown below:

Net earning is

= Earning per share × number of shares  - interest paid

= (1.50 × 2) - ($20 × 6%)

= $1.80

Now  the return on the investment is

= Net earning ÷ own investment

= $1.80 ÷ $20 × 100

= 9%

Hence, the return on the investment is 9%

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Allen, inc., has a total debt ratio of .34. what is its debt-equity ratio
lawyer [7]
Total debt ratio is the ratio of total debt to total assets 
i.e 
Total debt ratio = Total debt / Total assets  
But Total assets is nothing but total equity plus total debt  
Now let us consider, 
TD = Total debt  
TE = Total equity 
TA= Total assets   
Therefore, 
Total debt ratio = TD/TA 
But as mentioned above 
TA = TD + TE  
total debt ratio = Total debt/(total debt+total equity) 
total debt ratio = .34(given) 
.34 = TD / (TD + TE)  
Solving this equation yields:  
0.34 = 1/(1+ TE/TD) 
0.34(1+TE/TD) = 1 
0.34 + 0.34TE/TD =1 
.34(TE/TD) = 1 - 0.34 
0.34 (TE/TD) = 0.66 
0.34TE = 0.66TD  
Now, Debt equity ratio is the ratio of Total debt to total equity  
Debt-equity ratio = TD / TE 
Debt-equity ratio = 0.34 / 0.66 
Debt-equity ratio = 0.51515152
6 0
4 years ago
Why is it a good idea to disclose a bit about yourself when speaking to groups?
Sauron [17]
Because they might misuse your information
3 0
3 years ago
Read 2 more answers
Discuss the nature of COIDA​
atroni [7]

Answer:

please give me brainlist and follow

Explanation:

The main objective of the COIDA is to facilitate a process which provides for payment of medical treatment and compensation for disablement caused by occupational injuries and diseases sustained by employees in the course of their employment, or for death resulting from such injuries or diseases;

6 0
3 years ago
Crane Company issued common stock for proceeds of $389000 during 2019. The company paid dividends of $88000 and issued a long-te
ivann1987 [24]

Answer:

$284,000

Explanation:

Calculation to determine what The financing section of the statement of cash flows will report net cash inflows of

Using this formula

Net cash inflows=Common stock-Dividends-Treasury stock

Let plug in the formula

Net cash inflows= $389000-$88000 -$17000

Net cash inflows=$284,000

Therefore The financing section of the statement of cash flows will report net cash inflows of $284,000

6 0
3 years ago
Suppose Turkey has exports of 2 billion Turkish​ Lira, while its imports are 2 billion Turkish Lira. Calculate​ Turkey's "Index
Damm [24]

Answer:

40%

Explanation:

The index of openness measures how much a country is exposed to international trade. It is calculated by this formula:

Index of Openness= (Exports(X)+Imports (M))/GDP

Index of Openness= (2 billion+2 billion )/10 billion

Index of Openness= 0,4*100=40%

5 0
4 years ago
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