If the generated income cash of  some company were used to buy back common stock,thus reducing the amount of common equity ,how  would this affect  the return on equity (ROE),return on Asset(ROA) and ratio of total debt to total asset?

Q: What is the impact of decrease in assets or increase in liabilities resulting in decreases in…

A: when the assets reduces, the profits of the company also tends to fall. there can be no chance of…

Q: Which of the following statements is CORRECT? O The more depreciation a firm reports, the higher its…

A: Depreciation means reduction in value of fixed assets over the period of time. It is for normal wear…

Q: Which of the following is the correct statement about the inflation figure that is included in the…

A: Cost of capital is the required return necessary to make a capital budgeting project

Q: Assume that each of the following changes is independent (i.e., except for this change, all other…

A: The earning for the shareholders is an important element that induces them to invest the capital in…

Q: The wealth created by a company is reflected in the Select one: a. Current liabilities O b. Current…

A: The wealth is created by the business organization which provides value to the organization. The…

Q: How to use Return on Equity ratio to determaine whether a company needs to issue stocks or bonds to…

A: Return on equity is a ratio which is used by companies to measure financial performance and helps…

Q: If a firm’s common-size income statement shows that the earnings after tax percentage is too low,…

A: The common size statement is a statement related to performance of company with respect to base…

Q: In finance, as in accounting, the two sides of the balance sheet must be equal.  we valued the asset…

A: High leverage in a company refers that the proportion of debt is significantly higher than a normal…

Q: The most important factor to consider when determining the dividends to be declared is *…

A: Dividend is a part of Net profit earned by the entity & distributed among the equity…

Q: A business can be valued by capitalizing its earnings stream. Does one measure make more sense than…

A: Hello. Since you have posted multiple questions and not specified which question needs to be solved,…

Q: One major component of Equity is Contributed Capital. What does Contributed Capital represent? Group…

A: The question is related Contributed Capital. Contributed Capital is the paid up capital is the…

Q: One major component of Equity is Retained Earnings. What does Retained Earnings represent? Group of…

A: Retained earnings are undistributed profits of the company and the same is retained for future…

Q: Which of the following events would not improve (increase) a company’s return on equity? (Assume all…

A: Ratio analysis means that various ratio can be calculated with the given date of the company and…

Q: Why did the analysts add back stock expenses to get to free cash flows?

A: Stock Compensation: It is a method used by companies to motivate employees by paying them with…

Q: What rate do investors use to discount the capital gains and cash flows of firms?

A: Discounted cash flow estimates the present value of an asset by using projected cash flows.…

Q: Which of the following is not meant for the Cost of capital? O a. Cost of capital is the rate of…

A: Kc is the WACC of the entity. It is computed using the Proportionate weight given to the instrument…

Q: The owner's equity is computed as follows: Cash inflows less cash outflows Revenues less expenses…

A: Revenue: Revenue or Sales revenue is the amount earned by the company by selling the goods or…

Q: When would a company be able to declare a cash dividend?

A: Dividend means the amount given to shareholder of the company as profit distribution by company.

Q: rn on total assets can improve its return on equity, all else remaining the same, but   A.…

A: Return on Equity (ROE) evaluates asset management, cost management, and debt management, a company…

Q: hat does it mean when a company has zero net income but its stock price has increased? How do you…

A: Equity method: The equity method is used to record the profit earned by a company by investing in…

Q: Explain how the Du Pont system of analysis breaks down return on assets. Also explain how it breaks…

A: A stakeholder is defined as a "person or group that has an interest in any decision or action of an…

Q: Revaluation surplus of a company will be shown in a. Statement of cash flows b. iIt will be shown…

A: revaluation surplus is an equity account where any upward changes in the value of capital assets…

Q: Which of the following statements is not true? a) The return on shareholders’ funds can be…

A:

Q: Discuss and explain the difference between profit/loss and cash flow.

A: Given: The difference between the profit/loss and cash flow of the finance of the entity or an…

Q: If retained earnings were used instead of new issuances, what wo

A: In this question, we have to find the cost of equity and the new financing cost.

Q: Which of the following statements is NOT CORRECT? The corporate valuation model can be used both for…

A: Corporate valuation is a systematic process to find the true value based on financial data.  Most of…

Q: what is the need to conduct the Solvency Analysis when the liquidity analysis serves the purpose of…

A: “Since you have asked multiple question, we will solve the first question for you. If youwant any…

Q: Did the cash flow from operations cover the dividend payment made by the firm (if any)?

A: Hello, since your question has multiple parts we will solve the first question for you. If you want…

Q: How a firm splits its income between retained earnings and dividends does not affects its rate of…

A: Income is the revenue earned by the company after the charge of all the associated expenses. A…

Q: The internal rate of return (IRR) can best be described as: A. the discount rate at which a set of…

A: It is one of capital budgeting discounting techniques which is used as a metric in financial…

Q: Which of the following statements is most correct?(a) A decline in the inventory turnover ratio…

A: a) If there is a decline in inventory turnover ratio it indicates that the number of days stock held…

Q: Why does an increase in the ratio of current assets to total assets decrease both profits and risk…

A: Current assets and current liabilities are utilized to decide the liquidity of an organization. At…

Q: Compare Dividend Valuation Model with Capital Asset Pricing Model in the context of calculating cost…

A: The dividend discount model and the capital asset pricing model are two methods for estimating cost…

Q: Which of these would best improve a firm's liquidity position? * a. Lower profitability b.  Higher…

A: The following is a summary of the risk-return syndrome: When liquidity rises, the chance of…

Q: True of False? Contributed capital decreases when the company has a net loss. If your answer is…

A: Net income is an excess of revenue over expenditure and Net loss indicates that there are more…

Q: What does it mean when a company’s free cash flow is negative in one or more years? Do negative…

A: Cash flows are the measures of the cash inflows and cash outflows that the corporation earns and…