Business, 24.12.2020 02:40 NeverEndingCycle
he director of capital budgeting for See-Saw Inc., manufacturers of playground equipment, is considering a plan to expand production facilities in order to meet an increase in demand. He estimates that this expansion will produce a rate of return of 11%. The firm's target capital structure calls for a debt/equity ratio of 0.8. See-Saw currently has a bond issue outstanding that will mature in 25 years and has a 7% annual coupon rate. The bonds are currently selling for $804. The firm has maintained a constant growth rate of 6%. See-Saw's next expected dividend is $2 (D1), its current stock price is $40, and its tax rate is 40%. Should it undertake the expansion? (Assume that there is no preferred stock outstanding and that any new debt will have a 25-year maturity.)
Answers: 2
Business, 22.06.2019 15:10
Popeye produces 20 cans of spinach in 8 hours. wimpy produces 15 hamburgers in 10 hours. if each hamburger trades for 1.5 cans of spinach, then: a.wimpyâs production and productivity are greater than popeyeâs. b.popeyeâs production is greater than wimpyâs, but his productivity is less. c.wimpyâs production is greater than popeyeâs, but his productivity is less. d.popeyeâs production and productivity are greater than wimpyâs.
Answers: 3
Business, 22.06.2019 15:50
Singer and mcmann are partners in a business. singerâs original capital was $40,000 and mcmannâs was $60,000. they agree to salaries of $12,000 and $18,000 for singer and mcmann respectively and 10% interest on original capital. if they agree to share remaining profits and losses on a 3: 2 ratio, what will mcmannâs share of the income be if the income for the year was $15,000?
Answers: 1
Business, 22.06.2019 19:30
Anew firm is developing its business plan. it will require $615,000 of assets, and it projects $450,000 of sales and $355,000 of operating costs for the first year. management is reasonably sure of these numbers because of contracts with its customers and suppliers. it can borrow at a rate of 7.5%, but the bank requires it to have a tie of at least 4.0, and if the tie falls below this level the bank will call in the loan and the firm will go bankrupt. what is the maximum debt ratio the firm can use? (hint: find the maximum dollars of interest, then the debt that produces that interest, and then the related debt ratio.)a. 41.94%b. 44.15%c. 46.47%d. 48.92%e. 51.49%
Answers: 3
Business, 22.06.2019 20:00
What part of the rational model of decision-making does the former business executive âelliottâ have a problem completing?
Answers: 2
he director of capital budgeting for See-Saw Inc., manufacturers of playground equipment, is conside...
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