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2 years ago

What is meant by trading on the equity? (b) how would you determine the profitability of trading on the equity? chegg.

Business

1 answer:

aleksklad [387]2 years ago

4 0

Answer:

Trading on equity defines the increase in profit earned by the equity shareholders due to presense to financial charges.

When a company is higher the rate of interest on borrowed funds.so company should option for trading on equity.

Explanation:

hope it helps u

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Cold Goose Metal Works Inc. just reported earnings after tax (also called net income) of $95,000,000, and a current stock price

aivan3 [116]

Answer:

$12.22 per share

Explanation:

The computation of the stock price one year from now is shown below;

Current EPS = Net Income ÷ Number of shares

= $95,000,000/5,500,000

= $17.2727

Now

P/E Ratio = Market Price per share ÷ Earnings per share

= $14.75 ÷ 17.2727

= 0.8539 times

Now

Revised EPS = $95,000,000 × 1.25 ÷ 8,300,000

= $14.3072

So, the Price is

= 14.3072 × 0.8539

= $12.22 per share

6 0

3 years ago

12-3. (Break-even point and selling price) Simple Metal Works, Inc. will manufacture and sell 300,000 units next year. Fixed cos

aev [14]

Answer:

Selling price= $5.08

Explanation:

Giving the following information:

Number of units= 300,000

Fixed costs= $350,000

Desired profit= $250,000

Variable cost rate= 0.65

First, we need to calculate the unitary contribution margin using the break-even point formula:

Break-even point in units= (fixed costs + desired profit)/ contribution margin per unit

300,000 = (350,000 + 250,000) / contribution margin per unit

300,000 contribution margin per unit = 600,000

contribution margin per unit= 600,000/300,000

contribution margin per unit= $2

If the variable cost rate is 0.65, then:

Unitary varaible cost= 2/0.65= $3.08

Selling price= contribution margin per unit - unitary varaible cost

Selling price= 2 - (-3.08)

Selling price= $5.08

5 0

3 years ago

7. Which type of business document do you think you are most likely to use often in your company? Why?

Sever21 [200]

Company bylaws for corporations. Most states require corporations to keep a written record of bylaws, although you don’t need to file the document with a state office. Bylaws define how the company will govern itself. Even if your company is incorporated in the handful of states that don’t require bylaws, they are still a good idea as they spell out your business’ structure, individual roles, and governance issues. For example, bylaws can help settle a dispute on the length of a director’s term or define if you need a simple majority to approve a decision.

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3 years ago

Which of the following is a highly suspicious financial statement relationship? a. Increased revenues with increased cash flows

Crank

Answer:

The correct answer is letter "C": Increased inventory with decreased payables.

Explanation:

If in a general ledger there is more inventory but fewer account payables it is a clear indication that there has been a mistake recording the operations of a company or there are activities in the company that might be the result of fraud. Accounts payable represent obligations of the company to a third party because of short-term debt incurred. If there is more inventory, the logical is to have more accounts payable recorded.

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3 years ago

Which of the following is a type of sales promotion?

galben [10]

All of these is your answer

4 0

3 years ago