All categories

2 years ago

Why is a bank more likely to offer you credit if you have a cosigner?

Business

1 answer:

Brums [2.3K]2 years ago

5 0

Answer:

Because a cosigner is another person who is also responsible for ensuring the loan is paid.

Explanation: A cosigner is a person who is signing on to the loan and by doing so, they are jointly taking on responsibility for repayment of the loan. So basically loan repayment is being guaranteed by the person taking out the loan and the cosigner.

You might be interested in

The market value of Fords' equity, preferred stock, and debt are $ 7 billion, $ 2 billion, and $ 13 billion, respectively.

steposvetlana [31]

Answer:

WACC is 9%

Explanation:

WACC is the average cost of capital of the firm based on the weightage of the debt and weightage of the equity multiplied to their respective costs.

According to WACC formula

WACC = ( Cost of equity x Weightage of equity ) + ( Cost of debt ( 1- t) x Weightage of debt ) + ( Cost of Preferred equity x Weightage of Preferred equity )

As per given data

Market Values

Equity = $7 billion,

Preferred stock = $2 billion

Debt = $13 billion

Cost

Equity

Capital asset pricing model measure the expected return on an asset or investment. it is considered as the cost of common stock.

Formula for CAPM

Cost of Equity = Risk free rate + beta ( market return - risk free rate )

Cost of Equity = Rf + β ( Mrp )

Cost of Equity = 3% + 1.6 ( 8% ) = 15.8%

Preferred stock = $2 / $26 = 0.077 = 7.7%

Debt = 8%

Placing values in the formula

WACC = ( 15.8% x $7 billion / $22 billion ) + ( 8% ( 1- 0.3) x $13 billion / $22 billion ) + ( 7.7% x $2 billion / $22 billion )

WACC = 5.03% + 3.31% + 0.7% = 9.04%

7 0

3 years ago

59. What is a contingency? a. An existing situation where certainty exists as to a gain or loss that will be resolved when one o

Vera_Pavlovna [14]

Answer:

Correct option is D.

Explanation: A contingency is an existing situation where uncertainty exists as to possible gain or loss that will be resolved when one or more future events occur or fail to occur.

In business, a contingency plan is a plan or course of action a company would implement if an unexpected event occurs. Basically, what this means is that a company is preparing for any outcome.

6 0

2 years ago

Suire Corporation is considering dropping product D14E. Data from the company's accounting system appear below:

Oksana_A [137]

Answer and Explanation:

a. The computation of the net operating income earned is shown below:

Sales $800,000

Less: Variable cost -$381,000

Contribution margin $419,000

Less: Fixed manufacturing expenses - $263,000

Less : Fixed selling and administrative expenses - $211,000

Net operating income or (Loss) -$55,000

b. The computation of the financial advantage (disadvantage) of dropping product D14E is shown below:

Sales $800,000

Less: Variable cost -$381,000

Contribution margin $419,000

Less: Fixed manufacturing expenses - $202,500

Less : Fixed selling and administrative expenses - $117,500

Financial disadvantage -$99,000

Since there is a financial disadvantage so the product should not be dropped

We simply applied the above equation

7 0

3 years ago

Medallion Cooling Systems, Inc., has total assets of $10,000,000, EBIT of $2,000,000, and preferred dividends of $200,000 and is

liraira [26]

Answer:

Explanation:

The two attached pictures shows the explanation for this problem. I hope it help you. Thank you

4 0

2 years ago

Gantt charts are effective for project scheduling if:

pochemuha

Answer: c. The project contains simple activity sequences

Explanation:

Gantt chart is a firm of bar chart that depicts a project schedule as it helps in the scheduling of a particular project.

Gantt chart is a graphical tool that helps in showing the activities that are performed against time to the project team or project manager. Gantt charts are effective for project scheduling if such project contains simple activity sequences.

4 0

2 years ago