Answer:
<u>decreases</u>
Explanation:
As per modigliani- miller approach, the value of a firm is not dependent upon the choice of capital structure of the firm.
Capital structure refers to the the blend or mix of different sources of capital a firm avails to raise funds. Such as debt and equity.
As per MM proposition 2, the expected yield of a stock is equal to equity capitalization rate plus an additional compensation for risk assumed by employment of debt in the capital structure due to which the debt-equity ratio rises.
As proportion of debt is increased in the capital structure, the earnings available to stockholders rise but this rise is offset by the rise in the expectation of shareholders which offsets the effect and thus value of firm remains the same.
Return on equity is given by 
Thus, as the return on equity increases , the amount of equity in capital structure decreases as this net income rises owing to employment of more and more debt in the capital structure.
Answer:
<u>Annual rate of return which will be earned from today is 5.89%</u>
Explanation:
FV = PV (1+r)^n
r is int Rate per anum abd n is balance period
10000 = 6700 ( 1 + r)^n
10000 = 6700 ( 1 + r)^7
( 1 + r)^7 = 10000 / 6700
= 1.4925
1+r = 1.4925^(1/7)
= 1.0589
r = 1.0589- 1
= 0.0589 i.e 5.89%
Answer:
Financial Accounting standards Board (FASB)
Explanation:
Financial Accounting Standards Board (FASB) is a private body that works as a non-profit organization that main purpose is established accounting principles in the united states. FASB work for the government, private and for a non-profit organization to prepare and present their financial statement.
FASB working with international accounting standard boards for maintaining and preparing standards worldwide
Answer:
6.201%
Explanation:
Given that,
Net asset value = $12.90
By year-end net asset value = $12.30
Fund paid year-end distributions of income and capital gains = $1.40
change in NAV:
= By year-end net asset value - Net asset value
= $12.30 - $12.90
= -$0.6
Rate of Return:
= (change in net asset value + Distributions) ÷ Start of Year net asset value
= ( -$0.6 + $1.40) ÷ $12.90
= 0.8 ÷ $12.90
= 0.06201 or 6.201%
