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poizon [28]
3 years ago
8

Becker Industries is considering an all equity capital structure against one with both debt and equity. The all equity capital s

tructure would consist of 36,000 shares of stock. The debt and equity option would consist of 18,000 shares of stock plus $310,000 of debt with an interest rate of 9 percent. What is the break-even level of earnings before interest and taxes between these two options
Business
1 answer:
Grace [21]3 years ago
7 0

Answer:

The right approach is "55800".

Explanation:

The given values is:

Rate of interest,

= 9%

= 0.09

The interest cost will be:

= 310,000\times 0.09

= 27,900 ($)

Assumed return on capital employed are X. Break will also be whenever the dual capital requirements participate in almost the same earnings growth.

⇒ \frac{X}{36000} =\frac{X-27900}{18000}

⇒     X=(X-27900)\times \frac{36000}{18000}

⇒         =(X-27900)\times 2

⇒         =2X-55800

⇒    X=55800  

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This is further explained below.

<h3>Which of these transfers will be excluded from the client's total gifts in the year made?</h3>

Generally, If anything is referred to as "the client's," it means that it belongs to a single person, such as a client's file. The use of the clients' plural possessive demonstrates that we may attribute things to more than one client.

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CQ

Your client has made all of the following transfers. Which of these transfers will be excluded from the client's total gifts in the year made?

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