Answer:
Explanation:
Share repurchased = 176,000/ 32 = 5,500
Value of Equity = (52,000 - 5,500) x 32 = 1,488,000
Value of debt = 176,000
Debt Ratio = 176,000/ (176,000 + 1,488,000) = .10576
Leslie needs to reduce its investment in the firm by 10.576%
Leslie will sold stocks = .10576 x 500 = 53 shares
Therefore, Leslie need to Sell 53 shares and loan out the proceeds.
When the opportunity cost associated with increasing the production of one good or service in terms of another is constant at every level of production, then the production possibility frontier is Linear.
Opportunity costs address the potential advantages that an individual, financial backer, or business passes up while picking one option over another. Since opportunity costs are inconspicuous by definition, they can be barely noticeable.
Opportunity Costs= Absolute Income - Monetary Benefit.
The Production Possibility Frontier (PPF) is a bend on a chart that shows the potential amounts that can be delivered for two items if both rely on a similarly limited asset for their production. The PPF is additionally alluded to as the creation probability bend.
To learn more about Production Possibility Frontier is linear.
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Answer:
C. that issuing debt requires interest and principal payments to be paid thereby reducing the potential of management to waste resources.
Explanation:
Free Cash Flow is the cash generated by an organisationafter it has accounted for the outflows to capital assets maintenance costs and operating activities. Free Cash flow is a measure of a company's profitability after non-cash expenses in the account statement have been deducted. It is the cash flow an organisation has when it has limited or no debt obligations in its portfolio
The Hypothesis of free cash flow states that an organisation with a large amount of free cash will display less financial or spending discipline compared with an organisation that has debts obligations to spend cash on.
Based on the hypothesis, it becomes essential for such organisations to issue debts so that as the legal obligations (debts, principal and interest) increases, the potential to waste money as a result of fre cash flow reduces.
Answer:
$5,000
Explanation:
interest earned on the first coupon = ($120,000 x 5% x 6/12) - ($120,000 x 5% x 1/12) = $2,500
interests earned until October (for the $40,000) = $40,000 x 5% x 3/12 = $500
interests earned until December (for $80,000) = $80,000 x 5% x 6/12 = $2,000
total interest earned during the year = $2,500 + $500 + $2,000 = $5,000
