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
Lynna [10]
3 years ago
13

Health and Wealth Company is financed entirely by common stock that is priced to offer a 15 percent expected return. If the comp

any repurchases 25 percent of the common stock and substitutes an equal value of debt yielding 6 percent, what is the expected return on the common stock after refinancing
Business
1 answer:
nirvana33 [79]3 years ago
6 0

Answer: 18%

Explanation:

The expected return on the common stock after refinancing will be calculated thus:

Let's assume that common stock is 1000. Therefore, return will be:

= 15% × 1000 = 150

Since 25% of the common stock is repurchased, this will be:

= 25% × 1000 = 250

Then, this 250 is financed by debt at 6%, and this will be:

= 6% × 250 = 15

Then, the new return will be:

= 150 - 15 = 135

Expected Return will now be:

= 135/(1000 - 250)

= 135/750

= 18%

You might be interested in
The _________ pricing strategy maintains low prices and avoids the use of special sales.
Harrizon [31]
<span>This is everyday low pricing, which is also known as EDLP. Usually, the EDLP is in the range of a high-low retailer's promotional price. However, the EDLP is not a discounted price. People are attracted to this price, because it is something they can count on.</span>
4 0
4 years ago
1+1= ??<br><br> do you know know anyone who is a heather or a ashley??
Naddik [55]

Answer: 1 plus 1 is two

Explanation:

8 0
4 years ago
Read 2 more answers
Which of these is a sign that you're dealing with someone engaged in unfair lending
MAXImum [283]

Answer:

O All of the above

Explanation:

Honest and legitimate lenders require a borrower to be their client for a set period before they can advance credit to them. By the time the customer requests a loan, the lender will have some financial data to help them decide on the credit request.

Differentiating between a genuine and unfair lender is not that difficult. Unfair lenders are not interested in the borrower's ability to repay. They push a customer to sigh-up fast and for a high loan amount. The unfair lender aims at profiting from the collateral they receive as a guarantee for the loan. Genuine lenders are concerned about the risk involved in lending to a customer. They need some assurance that the client can repay.

7 0
3 years ago
A high quality leader must be a. task oriented. b. relationship oriented. c. both task and relationship oriented. d, neither tas
Black_prince [1.1K]

Answer:

C. Both task oriented and relationship oriented

Explanation:

A high quality leader must posses those two qualities and many others to be really effective. Both Task oriented and relationship oriented leadership are usually compared because of the varying outcomes the two present. But a leader that has the quality to combine those two methods becomes more effective.

Task oriented is focus on task or jobs that needs to be performed to meet company's goal or to achieve performance standard.

Relationship- oriented focuses on the motivation, satisfaction and general well being of team members under his leadership.

6 0
3 years ago
A sale consists of the passing of the _______ from the seller to the buyer for a price.
Brrunno [24]

A sale consists of the passing of the<u> title of goods</u> from the seller to the buyer for a price.

A price is the amount of payment or compensation (usually non-negative) that one party gives to another party in exchange for goods or services. In some cases, the production price is given another name.

If the product is a commercial "commodity", the payment for that product may be referred to as the "price". However, if the product is a "service", the product may have other names.

For example, the following graph shows several situations The price of a commodity is affected by the cost of production, the supply of the desired item, and the demand for the product. Prices are either set by the monopoly or imposed on the company by market conditions.

learn more about Prices here. brainly.com/question/2021001

#SPJ4

8 0
2 years ago
Other questions:
  • You will receive $225 a month for the next eight years from an insurance settlement. The interest rate is 7% compounded monthly
    8·1 answer
  • The Fields Company has two manufacturing departments, forming and painting. The company uses the weighted-average method of proc
    10·1 answer
  • 15 points :)!! Does reducing interest rates make it so banks make more loans, which overall increases the money supply????
    8·1 answer
  • Who is better Mario or Sonic
    7·2 answers
  • What is the tragedy of the commons?
    9·1 answer
  • This document summarizes why the project is important by describing the benefits of a selected component, and is used as a basis
    12·1 answer
  • If closing costs of $1,400 are associated with the refinance of reduce the monthly payment fro m $980 to $870 refinance, it woul
    10·1 answer
  • A statement of cash flows explains the differences between the beginning and ending balances of:Cash, cash equivalents, and shor
    8·1 answer
  • Based upon the following data, what is the cost of the land? Land purchase price $196,981 Broker's commission 18,718 Payment for
    13·1 answer
  • financial statement analysis applies analytical tools to financial statements and related data for making business decisions.
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!