Question
I'm unsure how to calculate this answer. Thank you! Using a modified discriminant function similar to Altman's, Burger Bank estimates the following coefficients for its
I'm unsure how to calculate this answer. Thank you!
Using a modified discriminant function similar to Altman's, Burger Bank estimates the following coefficients for its portfolio of loans: where Xl = debt to asset ratio; = net income and = dividend payout ratio. Using Z = 1.682 as the cut-off rate, what should be the debt to asset ratio of the firm in order for the bank to approve the loan? Selected Answer: B 46.5 percent. Answers: Response Feedback: A 40.0 percent. B 46.5 percent. C 51.5 percent. D 54.0 percent. E 65.0 percent. 1.682 = + 1.09(0.12) + 1.5(0.60) 1.682=1. 031 + (1.682 - 1.031) +1.4 = Xl = 0.465.
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
