1. You are evaluating the purchase of HypeToys, Inc. common stock that just paid an annual dividend of $1.80. You expect the div
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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.
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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
Here short term investment is debited as it increased the asset and credited the cash as decreased the asset.
here cash is debited as it increased the asset and credited the interest revenue as it also increased the revenue.
What Are Short-Term Investments?
- Marketable securities, commonly referred to as temporary investments or short-term investments, are financial investments that can be quickly converted to cash, usually within five years.
- After only three to twelve months, many short-term investments are sold or turned into cash. CDs, money market accounts, high-yield savings accounts, government bonds, and Treasury bills are a few typical examples of short-term investments.
- Short-term investments, also known as marketable securities or temporary investments, are financial investments that can be easily converted to cash, typically within 5 years.
- Typically, these investments are high-quality and highly liquid assets or investment vehicles.
- Short-term investments may also specifically refer to financial assets of a similar kind, but with a few additional requirements, that are owned by a company.
To know more about Short-term investment visit:
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