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crimeas [40]
3 years ago
10

MM Proposition II with taxes: Group of answer choices explains how a firm's WACC increases with the use of financial leverage. r

eveals how utilizing the tax shield on debt causes an increase in the value of a firm. supports the argument that business risk is determined by the capital structure employed by a firm. supports the argument that the cost of equity decreases as the debt-equity ratio increases. reaches the final conclusion that the capital structure decision is irrelevant to the value of a firm.
Business
1 answer:
schepotkina [342]3 years ago
4 0

Answer:

explains how a firm's WACC increases with the use of financial leverage.

Explanation:

According to the MM Proposition II with taxes, the cost of equity rises with the increases use of debt in the capital structure of a firm.  

r_{e} = r_{o} +( r_{o}  - r_{d} ) × \frac{D}{E}

As cost of equity increases, the firm's WACC increases also

The  MM Proposition I with taxes reveals how utilizing the tax shield on debt causes an increase in the value of a firm

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Cost of Preferred Stock Torch Industries can issue perpetual preferred stock at a price of $57.00 a share. The stock would pay a
labwork [276]

Answer:

the company’s cost of preferred stock is 10.53%.

Explanation:

given information:

perpetual preferred stock = $57.00

a constant annual dividend = $6.00

to determine the company’s cost of preferred stock we can use the following formula

cost of preferred stock = \frac{ annual dividend}{preferred stock}

                                   = \frac{6.00}{57.00}

                                   =10.53%

therefore, the company’s cost of preferred stock is 10.53%.

8 0
3 years ago
Sam and Joan made an offer of $250,000 asking the seller to pay all closing costs. They will put 10% down and pay one discount p
Archy [21]

Answer:

$27,500

Explanation:

Discount points are also called mortgage points and are fees paid as prepaid interest rate on a mortgage property.

One discount point is equivalent to 1% of the loan amount.

In the given scenario a down payment of 10% was made.

Also they are pay one discount point to close.

So total down payment to be made is 10% + 1% = 11%

Amount is cash for closing = 0.11 * 250,000 = $27,500

3 0
2 years ago
What are the kitchen tools and equipment needed to cook pancake.​
Firlakuza [10]
You need batter a pan something to flip with like a spatula. If you need to be specific you can say a whisk,a bowl, skillet,griddle,spatula.

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7 0
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Pls help me I would appreciate it
devlian [24]

Answer:

I WOULD SAY HIGH INTRUST RATE.

Explanation:

Hope this helps <3 HAVE A GOOD DAY!

6 0
2 years ago
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According to ______________, stock prices react instantaneously, completely and accurately to all publicly available information
Lelu [443]

Answer:

Theory of Efficient markets

Explanation:

According to this theory stock prices react instantaneously to new information

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