Fill in the table using the following information.Assets required for operation: $6,000Case A—firm uses only equity financingCase B—firm uses 30% debt with an 8% interest rate and 70%equityCase C—firm uses 50% debt with a 12% interest rate and 50%equityIf the answer is zero, enter "0". Round your answers for monetaryvalues to the nearest cent. Round your answers for percentagevalues to one decimal place.
What happens to the return on the stockholders’ equity as theamount of debt increases? Why did the rate of interest increases incase C?
The return on stockholders'equity -Select-increasesdecreasesincreases and thendecreasesdecreases and then increasesdoes not changeItem 22 asthe firm becomes -Select-lessmoreItem 23 financiallyleveraged. The rate of interest increase in case C due tothe -Select-increasedeclineItem 24 in the financialrisk.
Fill in the table using the following information. Assets required for operation: $6,000 Case A—firm uses only equity fi
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