Why does the use of debt lower the profit margin and the ROA?
Question:
Why does the use of debt lower the profit margin and the ROA?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 50% (2 reviews)
The use of debt can lower the profit margin and return on assets ROA for several reasons Interest Ex...View the full answer
Answered By
Antony Sang
I am a research and academic writer whose work is outstanding. I always have my customer's interests at heart. Time is an important factor in our day to day life so I am always time conscious. Plagiarism has never been my thing whatsoever. I give best Research Papers, Computer science and IT papers, Lab reports, Law, programming, Term papers, English and literature, History, Math, Accounting, Business Studies, Finance, Economics, Business Management, Chemistry, Biology, Physics, Anthropology, Sociology, Psychology, Nutrition, Creative Writing, Health Care, Nursing, and Articles.
5.00+
2+ Reviews
10+ Question Solved
Related Book For
Fundamentals Of Financial Management
ISBN: 9780357517574
16th Edition
Authors: Eugene F. Brigham, Joel F. Houston
Question Posted:
Students also viewed these Business questions
-
Balancing a diet using nonfixed and fixed ingredients.Problem: Prepare a 1000lb of a diet with 14% CP from corn (8.9% CP), SBM (46% CP), and a vitamin andmineral premix that is fixed and totals 10%...
-
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...
-
Canadian media and communications giant Rogers Communications Inc. is a publicly listed firm. Founded by Edward Rogers in 1960 with headquarters in Toronto, Ontario, the firm is now worth billions of...
-
What is the potential difference across one wire of a 30-m extension cord made of 16-gauge copper wire carrying a current of 5.0 A?
-
A company's balance sheets show a total of $30 million long-term debt with a coupon rate of 9 percent. The yield to maturity on this debt is 11.11 percent, and the debt has a total current market...
-
Find r'(t), r(t 0 ), and r'(t 0 ) for the given value of t 0 . Then sketch the plane curve represented by the vector-valued function, and sketch the vectors r(t 0 ) and r'(t 0 ). Position the vectors...
-
C. George (Controls) Ltd manufactures a thermostat that can be used in a range of kitchen appliances. The manufacturing process is, at present, semi-automated. The equipment used cost 540,000 and has...
-
Chucks Brokerage Service (CBS) is a discount financial services firm offering clients investment advice, trading services, and a variety of mutual funds for investment. Chuck has collected the...
-
Case Study: DEF Manufacturing Ltd. DEF Manufacturing Ltd. incurred the following costs during the year 2023: Direct materials: $200,000 Direct labor: $150,000 Factory overheads: $100,000...
-
Using more debt lowers profits and thus the ROA. Why doesnt debt have the same negative effect on the ROE?
-
Identify six profitability ratios, and write their equations.
-
The following stem-and-leaf plot gives the number of juniors who took a driver education course at Guy Patterson High School over the last two decades. Construct a box-and-whisker plot based on the...
-
How do talent analytics and predictive modeling enhance workforce planning and succession management strategies within dynamic organizational contexts ?
-
How have assumptions in economics changed over time? 1) Based on the information provided in the Ragan article (Ragan, C. (2015: June 16) Adam Smith's greatest legacy is his balanced approach. The...
-
Hoffman Healthcare, a pharmaceutical firm, is considering investing in a new business - cosmetics. Hoffman has 350 million shares outstanding trading at $ 30 per share; its stock has a beta of 1.20....
-
Ben Gordon, Inc. manufactures 2 products, wheels and seats. The company has estimated its overhead in the assembling department to be $ 3 3 0 , 0 0 0 . The company produces 3 0 0 , 0 0 0 wheels and 6...
-
This is the chemical formula for lead (II) nitrate Pb(NO 3 ) 2 Calculate the mass percent of oxygen in lead (II) nitrate. roundyour answer to the nearest percentage.
-
Company reports the following financial information before adjustments. Instructions Prepare the journal entry to record Bad Debt Expense assuming Rodriguez Company estimates bad debts at (a) 3% of...
-
CLASS PERIO Solving Linear Equations: Variable on Both Sides Solve each equation. 1) 6r+ 7 = 13 + 7r 3) -7x-3x+2=-8x-8 5)-14 +66+7-26=1+5b 7) n-3n = 14-4n 2) 13-4x=1-x 4)-8-x= x - 4x 6)n+2=-14-n 8)...
-
Six years ago the Singleton Company issued 20-year bonds with a 14% annual coupon rate at their $1,000 par value. The bonds had a 9% call premium, with 5 years of call protection. Today Singleton...
-
Heymann Company bonds have 4 years left to maturity. Interest is paid annually, and the bonds have a $1,000 par value and a coupon rate of 9%. a. What is the yield to maturity at a current market...
-
Hooper Printing Inc. has bonds outstanding with 9 years left to maturity. The bonds have an 8% annual coupon rate and were issued 1 year ago at their par value of $1,000. However, due to changes in...
-
Pregunta 51 pts Aldo es un joven profesor del rea de Matemticas que, actualmente, trabaja en un colegio de la capital de Honduras. En una de sus clases, comparti con sus estudiantes que el valor del...
-
Bristol Syrup Company Ltd (BSC) makes a unique syrup using cane sugar and local herbs. The syrup is sold in small bottles and is prized as a flavouring for drinks and for use in desserts. The bottles...
-
Casey Nelson is a divisional manager for Pigeon Company. His annual pay raises are largely determined by his divisions return on investment (ROI), which has been above 23% each of the last three...
Study smarter with the SolutionInn App