1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
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%

You might be interested in
While preparing your risk responses, you identify additional risks. What should you do? Add reserves to the project to accommoda
saw5 [17]

Answer: Document the risk and calculate the expected monetary value based on the probability and impact of the occurrences.

Explanation:

Risk response refers to the development of strategic options to reduce the threats and enhance opportunities to the objectives of the project.

It should be noted that when new risks are identified, such risks go through the process of risk management and one needs to be able to know the risk probability and risk impact and then get to curtail them.

8 0
2 years ago
How long can foodborne illnesses last
Helga [31]

Answer: Symptoms begin 2 to 10 days after becoming infected, and may last 1 to 2 weeks.

Explanation:

3 0
3 years ago
Which of the following would be most likely associated with the expansionary phase of the economic business cycle?
Marat540 [252]
I’m not exactly sure but- expansion is the phase of the business cycle where real GDP grows for two or more consecutive quarters, moving from a trough to a peak. This is typically accompanied by a rise in employment, consumer confidence, and equity markets. Expansion is also referred to as an economic recovery. Knowing this, it cannot be A where unemployment is high or B where inflation is high because inflation is the rise in the general level of prices where a unit of currency effectively buys less than it did in prior periods, it shouldn’t be D because the profits wouldn’t be on a decline, so making a guess using elimination it’s most likely C businesses produce more and hire workers
6 0
3 years ago
20 points!!
Volgvan

☻ ~~~~~~~~~~~~ Hello! ~~~~~~~~~~~~~~~ ☻

➴ They might hire C. A public relations manager

They might hire a public relations manager because public relation managers deal with the media and the press.

~ ʜᴏᴘᴇ ᴛʜɪꜱ ʜᴇʟᴘꜱ! :) ♡

~ ᴄʟᴏᴜᴛᴀɴꜱᴡᴇʀꜱ ♡

4 0
2 years ago
Read 2 more answers
One common advantage of a long-term investment is
jeka94
One common advantage of long term investment is higher return.
The longer you stay on an investment the bigger possibility to earn bigger interest and return. You might sometimes experiences losing but still you have the chance to get back what you loss over the time.
8 0
3 years ago
Read 2 more answers
Other questions:
  • Zing Inc. is a large fashion brand that manufactures clothing and shoes. The top managers of Zing have decided to use the profit
    11·1 answer
  • It’s been a year since Roland started a small retail business. His only supplier went bankrupt after a few months. Roland’s busi
    5·2 answers
  • The most effective form of business organization for raising capital is the a. sole proprietorship. b. syndicate. c. joint ventu
    10·1 answer
  • 7. XYZ stock price and dividend history are as follows: An investor buys three shares of XYZ at the beginning of 2010, buys anot
    15·1 answer
  • The accuracy of cost-volume-profit analysis is limited because it assumes a strictly linear relationship between the variables.
    8·1 answer
  • Wildhorse Co. entered into these transactions during May 2017, its first month of operations. 1. Stockholders invested $31,500 i
    12·1 answer
  • At a listing appointment, the seller of a large, expensive home on the water gives specific instruction to the sales associate n
    10·1 answer
  • Beaverton Lumber purchased a milling machine for $35,000. In addition to the purchase price, Beaverton made the following expend
    8·1 answer
  • Pedro wants to open his own business. To get a loan for the business, the bank needs him to give them some collateral. What is a
    5·1 answer
  • A classified balance sheet can be described as a balance sheet that: (Check all that apply.) Multiple select question. is more u
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!