Answer:
They should not make the change because the price of the stocks will decrease.
Explanation:
the current price of the stocks using the perpetuity formula = dividend / required rate of return
current price with current capital structure = $5.64 / 0.123 = $45.85
if the company changes its capital structure by increasing debt, the price of the stocks will be
$5.92 / 0.136 = $43.53
since the price of the stocks would actually decrease if the capital structure changes, the change should not be made. The stockholders' wealth is measured by the price of the stocks, and if the price of the stocks decreases, then the stockholders' wealth also decreases.
Answer:
whats the question this is just a statement?
Explanation:
I would like to help but I need a question
When two companies come together strategically to operate is called a joint venture.
<h3>What is a Joint Venture?</h3>
A Joint simply put is when two separate entities or business agree to share resources with the aim of archeiving similar or one objective.
Mostly, this is carried out when a company intend to enter a foreign market.
Learn more about joint venture here:
brainly.com/question/9389546
The depreciation tax shield based on the EBIT, the tax rate and the depreciation is $540.
<h3>How do you find the depreciation tax shield?</h3>
This can be found as:
= Depreciation x Tax rate
Solving gives:
= 1,800 x 30%
= $540
Find out more on the depreciation tax shield at brainly.com/question/24192125.
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The State Farm's Promise of Customer Satisfaction on recycled sheet metal is for at least as long as the OEM would have warranted its new replacement part. Thus 2nd option is correct.
<h3>What is Customer satisfaction?</h3>
Customer Satisfaction refers to the fulfillment of the needs and the desire of the customer by making the product as per there requirement. It is the measurement of the how much the customer is satisfied with the product.
In the above case, the State Farm provides the services to the customer by selling the metal sheets. They had promised the customer for providing the original equipment manufactured to be replaced with the new till the life span of the metal sheets.
Thus the correct option is 2nd.
Learn more about the Customer satisfaction here:
brainly.com/question/15298944
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