Question
The following information is provided for JoJo Inc. Year 2010 2011 2012 2013 2014 Current ratio 1 1.2 1.2 1.1 1 Quick ratio .5 .6
The following information is provided for JoJo Inc.
Year 2010 2011 2012 2013 2014
Current ratio 1 1.2 1.2 1.1 1
Quick ratio .5 .6 .5 .4 .6
EM 1 2 2.75 4 3
TIER 6 6 7 8 6
PM .10 .12 .11 .13 .14
Firm Value $100 $150 $180 $140 $160
Year 2015 2016 2017 2018 2019
Current ratio 1 1.2 1.2 1.1 1
Quick ratio .5 .6 .5 .4 .6
EM 1 2 2.75 4 3
TIER 6 6 7 7 6
PM .10 .12 .11 .14 .13
Firm Value $100 $150 $180 $140 $160
If you were a consultant for the company and watched the optimal capital structure presentations, what would you recommend as the optimal capital structure, as measured by TDR (total debt ratio)?
- TDR = 0
- TDR = .636
- TDR = .300
- TDR = .333
- TDR = .200
- TDR = .500
- TDR = .666
- TDR = .75
- TDR = 1
- TDR = .100
- TDR = .600
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Practical Financial Management
Authors: William R. Lasher
7th edition
128560721X, 9781133593669, 1133593682, 9781285607214, 978-1133593683
