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Oksanka [162]
2 years ago
12

Bonnie is writing a growth plan for her bicycle repair shop. She wants to pay off the loan for the building she uses for her bus

iness within ten years. Which part of a growth plan should she document this goal?
Choose the answer.

financial goals
expansion opportunities
marketing plan
staffing needs and responsibilities
Business
1 answer:
attashe74 [19]2 years ago
6 0

Answer:

financial goals.

Explanation:

It is a goal and has a financial thing

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The total market value of the equity of ITM is $6 million, and the total value of its debt is $4
timofeeve [1]

Answer:

a. The required rate of return on Okefenokee stock is 16%.

b. WACC = 10.56%.

c. Estimate the discount rate for an expansion of the company's present business.

It should be the same as the WACC = 10.56%

d. The required rate of return on Okefenokee's new venture is Ke = 18 %.

Explanation:

Here the given is,

E = $6 million, D = $4 million, Beta = 1.2,

Rmp = the expected risk premium on the market =10%.

Rf = The Treasury bill rate = 4%

a. The required rate of return on Okefenokee stock,

Ke = Rf + Beta \times Rmp = 4 + 1.2 \times 10 = 16%%.

b. Tax rate, T = 40%

The proportion of debt =Wd = D / (D + E) = 4 / (6 + 4) = 0.4

Proportion of equity, We = 1 - Wd = 1 - 0.4 = 0.6

Cost of debt, Kd = Risk-free rate as debt is free of default = 4%

WACC = Wd \times Kd \times (1 - T) + We\times Ke\\\\ = 0.4 \times4\times (1 - 40) + 0.6 \times 16\\\\ = 10.56%

WACC = 10.56%.

c. Estimate the discount rate for an expansion of the company's present business.

It should be the same as the WACC = 10.56%

d. Suppose the company wants to diversify into the manufacture of rose-colored glasses. The beta of optical manufacturers with no debt outstanding is 1.4. What is the required rate of return on Okefenokee's new venture? (You should assume that the risky project will not enable the firm to issue an additional debt)

Ke = Rf + Beta \times Rmp\\\\Ke     = 4 + 1.4 \times 10 = 18%

Ke = 18 %.

5 0
3 years ago
According to empirical research, in countries where stockholders' rights are strong, firms issue ____ stock than in countries wh
gavmur [86]

According to empirical research, in countries where stockholders' rights are strong, firms issue <u>More </u>stock than in countries where stockholders' rights are weak. Researchers conclude that strong stockholders' rights <u>reduce</u> moral hazard in stock markets.

<u>Explanation</u>

A <u>Moral hazard</u> is said to have occurred when one party (i.e insured Party) increases its exposure to risk  ,because some other party bears the cost of those Risk.It reflects the tendency of a person to take more risk as the consequence of the risk taken has to be beard by some other party

<u>The moral hazard problem is </u><u>less </u><u> severe in bond markets than in stock markets. In addition, moral hazard arises in bond markets when firms issue bonds with high default risk.</u>

<u />

So it is appropriate to say that , in countries where stockholders' rights are strong, firms issue <u>More </u>stock than in countries where stockholders' rights are weak. Researchers conclude that strong stockholders' rights <u>reduce</u> moral hazard in stock markets.

3 0
2 years ago
With respect to apple pay, is apple a producer, a consumer, or an intermediary? explain.
Solnce55 [7]
I dont know the answer 
6 0
3 years ago
What is the most important difference between a corporation and all other organizational​ forms?
babunello [35]

Answer:

Separate legal entity and taxation process

Explanation:

In a corporation, unlike in other forms of business, the owners and business are treated separately under the law. This principle is referred to as separate legal entity concept.

So for any contracts or deals entered into by a corporation, the owners cannot be held personally liable or asked to make good the losses incurred due to entering into those contracts unless of course if owners acted with mala fide intentions to earn personal profits. In short, owners personal assets cannot be taken away.

Secondly, the taxation slab applicable to corporations is also different in the sense corporations pay taxes on dividend paid. Secondly, when such dividend forms part of the revenue of shareholders, tax is again paid on that dividend income, this time by the shareholder. So in a way, shareholders get taxed twice, since in the first case, the company paying dividend recovers the tax on dividend paid from shareholders. This is referred to double taxation.

4 0
3 years ago
When economists think about market structures, they include market structures like pure monopoly and pure competition that are v
Kisachek [45]

Answer:

As explained below.

Explanation:

  • Asan economist the market is characterized by the interplay of 4 major fields like the Oligopoly, Monopoly, Perfect competition, Monopolistic competition. <u>Thus these structures were given by Adam Smith and his fellow Karl Marx. </u>
  • As an economist, he emphasized the laissez-faire model that is hard to find operating in a market as of the existence in 20 and the 21st century. The presence of the monopolistic competition which is a type of imperfect competition is that many producers sell or services that are different nature without carrying for the prices.
  • The oligopoly structure is either run by duopoly or monopoly or by the Ologospony which represents the market by many sellers but the demands of the few buyers.
  • The presence of perfect competition creates certain barriers ronery of the producers and consumers. However, these all tend to differ from the natural monopoly of one provider of a group of series meeting the one market.  
  • Hence certain market structures are related to the pecking and competitiveness in the market domain thus economists have o study them is greater depths.
7 0
3 years ago
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