Why does the use of debt lower ROA?
Question:
Why does the use of debt lower ROA?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 100% (QA)
The use of debt can lower the return on assets ROA for a company due to several reasons Interest Expense When a company utilizes debt financing it inc...View the full answer
Answered By
Muhammad Umair
I have done job as Embedded System Engineer for just four months but after it i have decided to open my own lab and to work on projects that i can launch my own product in market. I work on different softwares like Proteus, Mikroc to program Embedded Systems. My basic work is on Embedded Systems. I have skills in Autocad, Proteus, C++, C programming and i love to share these skills to other to enhance my knowledge too.
3.50+
1+ Reviews
10+ Question Solved
Related Book For
Intermediate Financial Management
ISBN: 9781337395083
13th Edition
Authors: Eugene F. Brigham, Phillip R. Daves
Question Posted:
Students also viewed these Business questions
-
Fill in the table using the following information. Assets required for operation: $10,000 Firm A uses only equity financing Firm B uses 30% debt with a 6% interest rate and 70% equity Firm C uses 50%...
-
List three specific parts of the Case Guide, Objectives and Strategy Section (See below) that you had the most difficulty understanding. Describe your current understanding of these parts. Provide...
-
Why does the use of financial leverage cause the current ratio to be lower than if no financial leverage was used?
-
Let x be the number of magazines a person reads every week. Based on a sample survey of adults, the following probability distribution table was prepared. Find the mean and standard deviation of x. 0...
-
Suppose three parallel-plate capacitors, whose plates have areas A1, A2, and A3 and separations d1, d2, and d3, are connected in parallel. Show, using only Eq. 17-8, that Eq. 19-5 is valid.
-
Less than two years ago, this Court decided Webbv. Sowell, 387 S.C. 328, 692 S.E.2d 543 (2010), which held that ordering a non-custodial parent to pay college expenses violates equal protection, thus...
-
The reciprocating mass, crank radius, and connecting-rod length of each of the cylinders in a two-cylinder in-line engine are given by \(m, r\), and \(l\), respectively. The crank angles of the two...
-
Consider the following information for three stocks, Stocks X, Y, and Z. The returns on the three stocks are positively correlated, but they are not perfectly correlated. (That is, each of the...
-
On 1 January 20x3, APL granted each of the 50 team leaders 2,000 share options, under which, they can elect to receive 2,000 shares or a cash payment equivalent to the value of 2,000 shares on 31...
-
What does ROE measure?
-
Why is the basic earning power ratio useful?
-
Explain how the factored form of the polynomial helps us in graphing it.
-
Use the phase diagram of Substance X below to find the melting point of X when the pressure above the solid is 2.3 atm. pressure (atm) 2.8. 0C 1.4 0 solid liquid 200 gas temperature (K) Note: your...
-
How many moles of O would be required in a combustion reaction with CH, to produce +15000. J of work at 298 K? CHg (1) + 15-0(g) 6CO (g) + 3HO (() 15000. 32.00 18.02 -AnRT X Drag into all 3 boxes....
-
Below are four amino acids. Refer to the Amino acid chart in your lecture slides and provide for each amino acid (A, B, C, and D): the name, group each amino acid belongs to, three- letter code and...
-
A heat pump uses refrigerant-134s as a working fluid to heat a home. It operates on an ideal vapour-compression cycle. The low pressure is 2bars and the compression ratio of the pump is 5. Address...
-
1. Polyacetylene is one of the first 'conjugated' polymers that was prepared. In this case, the monomer for the polymer is acetylene. Thus the repeating unit (the structure in the parenthesis in a...
-
On January 1, 2008, Holmes Co. borrowed cash from First City Bank by issuing an $80,000 face value, three-year term note that had a 7 percent annual interest rate. The note is to be repaid by making...
-
Michelles trust is subject to 3.8% surtax on the lesser of the trusts net investment income or the excess of the trusts adjusted gross income over the $12,400 threshold (the highest trust tax rate)....
-
Puckett Products is planning for $5 million in capital expenditures next year. Puckett's target capital structure consists of 60% debt and 40% equity. If net income next year is $3 million and...
-
Boehm Corporation has had stable earnings growth of 8% a year for the past 10 years and in 2015 Boehm paid dividends of $2.6 million on net income of $9.8 million. However, in 2016 earnings are...
-
Kendra Brown is analyzing the capital requirements for Reynolds Corporation for next year. Kendra forecasts that Reynolds will need $15 million to fund all of its positive-NPV projects and her job is...
-
How does sharding differ from traditional partitioning in relational databases, and what are the primary benefits of sharding in a distributed database environment ?
-
Explain the key considerations when designing a sharding strategy for a relational database, including factors like shard key selection and data distribution ?
-
(a) State a suitable numerical method that can be used to determine (i) The largest eigenvalue (ii) The smallest eigenvalue (b) Given (i) (ii) 2 2 10 M=83 4 (2 marks) 10 4 5 Evaluate the largest...
Study smarter with the SolutionInn App