Answer:
The correct answer is letter "A": managerial mistakes or self-interest.
Explanation:
Leveraged buyouts or LBOs carry a mixed image in the corporate world. An LBO is a way to buy a business with funds that are almost entirely lent by loans or bonds. Under certain instances, the company's properties being borrowed are used as collateral for the loans. That allows companies to make major acquisitions without investing a lot of money.
However, <em>LBOs are mostly considered managerial mistakes because of the large amount of debt the firm incurs without certainty that the combined operations of the companies will generate enough revenue for repayment and profit.</em>
Answer:
$16,100
Explanation:
Add the total manufacturing costs for the year to determine the cost of goods manufactured during the current year. Also remember to account for change in work in process inventory.
Answer: The answers are explained below.
Explanation:
• Cost of debt: The cost of debt is the interest rate that a company is charged on its debts. It is the interest paid on bonds, loans etc. The cost of debt is usually the before-tax cost of a debt.
• Cost of equity: The cost of equity is the return a firm pays to its equity investors e.g shareholders in order to reward them for the risk taken by investing their capital. Companies need capital to operate and grow hence, individuals and organizations who provide funds to such companies are rewarded.
• After tax WACC: The Weighted Average Cost of Capital (WACC) is a firm's combined cost of capital including preferred shares, common shares, and debt after the deduction of tax.
• Equity Beta: It measures the sensitivity of the stock price to changes in market. Equity Beta is also called levered beta.
• Asset beta: It is the beta of a firm without the effect of debt. It is a company's volatility of returns without its indebtedness.
• Pure play comparable: The pure play comparable is the taking of the beta estimate of another company that is comparable and in same line of business.
• Certainty equivalent: It is the guaranteed return that an individual would take now, rather than awaiting a higher but uncertain return later in the future.
Answer:
b
Explanation:
A price taking firm is a firm that must sell at the price determined by the forces of demand and supply. This is typical of firms that in industries that sell identical products.
If the firm charges a price higher than equilibrium price, customers would go to other suppliers and the firm would sell known of its product.
There would be no incentive for a firm to sell below equilibrium price because it would be earning losses.
An example of an industry characterised by price taking firms are perfectly competitive industries.
For example, a farmer selling oranges is an example of a price taking firm
Answer:
B. If both the current and accumulated E&P have deficit balances, a corporate distribution cannot be characterized as a dividend.
Explanation:
The statement written in the option B is correct.If both accumulated and current E&P have low balances,then we cannot corporate distribution as dividend rest of the options are false.Hence the answer is option B.
