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please answer all questions Based on the following data, what is the firm's ROE? Profit margin: .40 Asset turnover: 12 Total assets (book value): 1,000
please answer all questions
Based on the following data, what is the firm's ROE? Profit margin: .40 Asset turnover: 12 Total assets (book value): 1,000 Equity (book value): 500 Select one: O a..096 O b. .114 O c. 135 O d. 0710 "If the firm's ROE is too low, the firm should simply raise the equity multiplier." True or false Select one: O a. True O b. False *According to the signalling hypothesis, a higher (lower than expected dividend signals to investors that the management becomes more optimistic (pessimistic) about the firm's prospects, and the stock price adjusts accordingly." Select one: O a True Ob. False Assume that today is January 1. An American company purchases machine tools from Germany and for which it will pay 10 million on March 31. The company decides to hedge its euro position by entering into a euro forward contract. The current spot rate is $1.2 per euro, and the 3-month forward rate is $1.28 per euro. Suppose on March 31, the spot rate turns out to be $1.32 per euro What is the company's dollar gain or loss as the result of the hedging? Select one: O a. Again of 4 million Ob. A loss of 1 million Oc. A gain of 5 million Od A loss of 3 million "Forward contracts have fixed contract size." True or false? Select one: O a False Ob True "A firm may use stock repurchases as a means to reach the optimal capital structure if the firm's current debt ratio is higher than the optimal one." True or false? Select one: O a. True O b. False Based on the following information: Dividend payout ratio: 30% Profit margin: 40 Asset turnover: 30 Equity multiplier: 3 What is the growth rate? Select one: O a. 3 Ob. 105 c 183 Od 252 "Managers are reluctant to reduce the dividend because a dividend cut is usually interpreted by investors as the result of a downward assessment of the firm's future profitability by managers." True or false? Select one: O a False Ob True "The dividend irrelevance theory says that while dividend policy affects the stock value, it does not affect the cost of equity." True or false? Select one: O a False O b. True Step by Step Solution
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