subject
Business, 27.06.2019 04:20 Tripz3005

Commonwealth construction (cc) needs $3 million of assets to get started, and it expects to have a basic earning power ratio of 35%. cc will own no securities, so all of its income will be operating income. if it so chooses, cc can finance up to 30% of its assets with debt, which will have an 8% interest rate. if it chooses to use debt, the firm will finance using only debt and common equity, so no preferred stock will be used. assuming a 40% tax rate on all taxable income, what is the difference between cc’s expected roe if it finances these assets with 30% debt versus its expected roe if it finances these assets entirely with common stock?

ansver
Answers: 1

Another question on Business

question
Business, 22.06.2019 10:30
The advertisement demonstrates a popular way companies try to sell a product. what should consumers consider when it comes to the price of this product? it includes shipping and handling costs. it takes into account maintenance costs. it explains why this price is a good deal. it makes the full cost appears lower than it is.
Answers: 1
question
Business, 22.06.2019 12:10
Drag each label to the correct location on the image determine which actions by a manager are critical interactions - listening to complaints - interacting with customers - responding to complaints - assigning staff duties -taking action to address customer grievances -keeping track of reservations
Answers: 2
question
Business, 22.06.2019 16:30
Which of the following has the largest impact on opportunity cost
Answers: 2
question
Business, 22.06.2019 21:40
Which of the following is one of the main causes of inflation? a. wages drop so workers have to spend a higher percentage of income on necessities. b. demand drops and forces producers to charge more to meet their costs. c. rising unemployment cuts into national income. d. consumers demand goods faster than they can be supplied.
Answers: 3
You know the right answer?
Commonwealth construction (cc) needs $3 million of assets to get started, and it expects to have a b...
Questions
question
Social Studies, 05.05.2020 23:07
Questions on the website: 13722367