3) When firms increase their debt-equity ratio, we find: Group of answer choices The ROE always falls. The EPS always rises. Swings in return of equity (ROE) are smaller. Swings in earnings per share (EPS) are magnified.

Q: Your company’s stock sells for P60 per share. The dividend declared last year was P2.00. It’s…

A: To calculate the firm’s cost of new equity we will use the following formula   Firm’s cost of new…

Q: Determine the IRR

A: IRR is the discount rate where NPV of the cashflows calculated using IRR will be Zeera, which means…

Q: In theory, only systematic risk matters for the required return of a stock. Why does non-systematic…

A: Systematic risk refers to those which impacts the whole market rather than on particular stock…

Q: Which of the following statements is CORRECT? a. A bond is likely to be called if it sells at a…

A: Bonds are the secured instruments which generate fixed income for the investors in the form of…

Q: A company purchases an asset for P10,000 and plans to keep it for 20 years. If the salvage value is…

A: Depreciation: A depreciation is a non-cash expenses for the company. The depreciation expenses is…

Q: The cost price of 35 pairs of sport shoes was $350 per pair. AG Sport Center plan to sell all the…

A: Concept. Gross profit = selling price - cost of goods sold. Hence , Selling price = gross profit +…

Q: On the basis of these data, the real risk-free rate of return is   3% 2% 0% 1%

A: Real risk-free rate refers to the rate of interest that is expected by the investors on the…

Q: Please type the answer by computer, so i can see it clearly, thank you!!! Explain the tradeoff…

A: The term "mortgage" refers to a loan used to buy or maintain a home, land, or other type of asset.…

Q: The following data are gathered: ·       The real risk-free rate is 1.05% ·       Inflation premium…

A: Treasury Bills: T-bills are the treasury bills issued by the government. These bills are risk-free…

Q: that today is December 31, 2021. Use the following information that applies to Harrison Corporation…

A: Corporate valuation approach use the free cash flow available and that is discounted on WACC and…

Q: HEJO company has the current stock price of $20 today. Use a 1 step binomial tree to estimate the…

A: A binomial options tree method is a method of finding the option price based on the expected prices…

Q: Question 3 What lessons can the fund management industry learn from the Woodford investment scandal?

A: Woodford investment scandal Crucial facts of Neil Woodford's dangerous stock investments were…

Q: A & B D. Consider a port folio of E CRA) : 207. E CR): 30% 2. assets where nsky = 10% A,B :20% hnd…

A: Solution:- Minimum Variance Portfolio is that portfolio in which the weights of securities are such…

Q: Mr. Dalisay applied for a bank loan with a principal of P150,000 to be paid after five years in…

A: Principal loan amount = P150,000 Loan period = 5 years Current market rate = 0.10     Principal will…

Q: funde and exchange traded funds (ETES) is that:

A: A person looking to make investments in stocks and securities can consider different investment…

Q: National Company expects P30,000,00 in earnings next year. Its dividend payout ratio is 40%, and its…

A: Expected earnings = P30,000,000 Dividend payout ratio = 40% Equity to asset ratio = 40%

Q: TABLE 1: Net cash flows for three projects Project Omicron Project Upsilon Project Omega Year -10000…

A: Mutually Exclusive Projects: They are capital tasks which contend straightforwardly with one another…

Q: Discuss risks and returns characteristics of investing in ordinary shares and corporate bonds from…

A: A bond is a financial instrument that represents a loan made by an investor to a borrower (usually a…

Q: A bank applies a semi-annually capitalized nominal rate of 11.8% for an investment. Calculate…

A: The effective rate for any period refers to the actual proportionate cost which will be paid for…

Q: Use the following information for the next three questions. Instrument Corp. has the following…

A: Available for sale security (Non-Trading Investment): It is a  a debt or equity instrument which  is…

Q: A firm has an net operating profit of P300,000, interest of P35,000, and a tax rate of 25%. The firm…

A: Net operating profit = P300,000 Before tax cost of debt (Kd) = 0.06 Cost of equity (Ke) = 0.15…

Q: Suppose that a new government is elected and it changes the law applying to firms to: • Allow…

A: The trade-off theory of capital structure proposes that a corporation balances costs and advantages…

Q: Identify the following interest rates as nominal or effective: (ABET, SO1) A: 1%= 6% per semiannual,…

A: Effective rate is the rate of return for particular period. Say 1 month, 1 year and compounded 1…

Q: Which of the following rebalancing methodologies will ha market impact cost? Buy and Hold Momentum…

A: Rebalancing a portfolio It is a process by which the weights of the assets of a portfolio are…

Q: 1) The cost of debt is 4.2%, the cost of preferred stock is 9.5%, the cost of retained earnings is…

A: Equity financing is the process of raising money from the investors and give ownership to the equity…

Q: Question Owing to perennial complaints by students about the lack of accommodation problems on…

A: Before investing in new projects, profitability of the project is evaluated by using various methods…

Q: To retain high-performing engineers, a large semiconductor company provides corporate stock as part…

A: Present value analysis The present value is calculated by summing up the present value of all…

Q: What is the present value of 5,275 due in 6 months if 11% interest is paid

A: Future Value = (P * R * T) + PWhere P = Present ValueR = Rate of InterestT = Time Period

Q: See the "Madoff Securities" case for this question. Professional auditing standards discuss the…

A: GAAS are a set of principles that auditors follow while analyzing a company's financial records.…

Q: ibe how agency conflicts in multinational corporation can be addres

A: Agency problem exist in the corporation due to conflict of interest between the managers and…

Q: Engr. Tongol borrowed money from a loan shark. He receives from the loan shark an amount of P…

A: Simple interest = Amount borrowed * Interest rate * (Number of months / 12)

Q: A construction management company is examining its cash flow requirements for the next few years.…

A: Future value is referred as the current asset's value at the date of future on the basis of an…

Q: How do anthropological perspectives on debt help us make sense of modern-day financial markets?

A: Whether focused on family or with kula, anthropology's attention to credit and debt stretches back…

Q: Choose the correct answer. 4. Financial goals are classified as to duration as follows, except a.…

A: Financial Industry Regulatory Authority (FINRA) defines the three types of duration for  financial…

Q: Wallace Driving School's 2020 balance sheet showed net fixed assets of $2.3 million, and the 2021…

A: Answer -    Calculation of Net capital spending = Net fixed assets (2021) - Net fixed assets (2020)…

Q: The Tech company. Inc. is currently making windfall profits from the sales of financial programming…

A: Here,

Q: hich is not a section of the cash budge

A: Cash budget is a budget or an estimation of all cash inflows and outflows for a specified period of…

Q: A civil engineer planning for her retirement places 8% of her salary each year into a…

A: To calculate the future worth we will use the future value of growing annuity formula as follows:…

Q: Which of the following statements is true about broker markets? Group of answer choices Brokers…

A: In broker markets, brokers does the trade on behalf of their clients. Brokers do not have right to…

Q: Construct a sample problem of External Rate of Return (ERR).

A: External rate of return (ERR) or Internal rate of return (IRR) is the rate at which Present Value of…

Q: What is the portfolio beta?

A: To calculate the portfolio beta we will multiply weight of each stock with beta of each stock.

Q: What is the effective rate for an interest rate of 12% compounded continuously?

A: Effective Annual Rate: The effective annual rate of interest is the actual or the real rate of…

Q: pany sold a P9,500,000 issue of 20-year bonds with a total face value of P10,000,000. The bonds pay…

A: For payment of bonds there is need to create the sinking fund required semiannually so that bonds…

Q: Gs Co. has a debt to equity ratio of 25% and a weighted average cost of capital at 25%. The firm…

A: While computing weighted average cost of capital, the after-tax cost of debt is taken. Therefore, in…

Q: An analyst is studying the movement of the stock Philippines. His research and came up with a…

A: Total expected return (R) = 0.17   Probability of Strong economy (Ws) = 0.30 Probability of normal…

Q: A $1000 bond with a coupon rate of 6.5% paid semiannually has eight years to maturity and a yield to…

A: Bond Current Price  = C*(((1-(1+r)-n)/r)) + (Mv * (1+r)-n) Where C = Coupon amount  Mv = Maturity…

Q: There is 9 percent probability of recession, 24 percent probability of a poor economy, 44 percent…

A: The expected rate of return is the amount of interest an investor can hope to receive on an average…

Q: In theory, only systematic risk matters for the required return of a stock. Why does non-systematic…

A: There are two types of risk associated with return of a Stock 1. Systematic Risk :- is a risk that…

Q: Problem 8) For the cash flow diagram given below, compute the rate of return. $300 $250 $250 $200…

A: Rate of return is where present value of cashinflows equals to initial investment.

Q: Critically discuss whether, in general, mergers and acquisitions are successful in practice.

A: The phrases "mergers" and "acquisitions" are frequently used together, although their meanings…