Given answer with calculation If Orion Industries has $150,000 in debt and $150,000 in equity, then which of the followingis true?Options:a) The return on equity ratio is 1.b) The debt-to-equity ratio is 1.c) The return on assets ratio is 0.5.d) The firm has too much debt.

Let's analyze each option using the given information:Debt = $150,000Equity = $150,000Total assets =…

Answered: If Orion Industries has $150,000 in…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter14: Capital Structure Management In Practice

Section: Chapter Questions

Problem 23P

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A firm's equity beta is 1.2 and its debt is risk free. Given a 0.7 debt to equity ratio, what is the firm's asset beta? (Assume no taxes.)
If the times interest earned ratio: Multiple Choice Increases, then risk increases. Increases, then risk decreases. Is greater than 1.5, the company is in default. Is less than 1.5, the company is carrying too little debt. Is greater than 3.0, the company is likely carrying too much debt.
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Which of the following statements is correct?(a) The quickest way to determine whether the firmhas too much debt is to calculate the Timesinterest-earned ratio.(b) The best rule of thumb for determining the firm’sliquidity is to calculate the current ratio.(c) From an investor’s point of view, the price-toearnings ratio is a good indicator of whether ornot a firm is generating an acceptable return tothe investor.(d) The operating margin is determined by subtracting all operating and non-operating expensesfrom the gross margin.
Can you show how this is done
Please see image to answer question. The options for F are as follows;The firm should proceed with the recapitalization.The firm should not proceed with the recapitalization.
Show your work for the following A firm's equity beta is 1.2 and its debt is risk free. Given a 0.7 debt to equity ratio, what is the firm's asset beta? (Assume no taxes.) Multiple Choice A) 0.7 B) 0 C) 1.0 D) 1.2
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How would each of the following scenarios affect a firm’s cost of debt, kd(1 – T); its cost of equity ke and its WACC? Indicate with a plus sign (+), a minus (-) or a zero if the factor would raise, would lower or would have indeterminate effect on the item in question. Assume for each answer that other things are held constant even though in some instances this would probably not be true. Be prepared to justify your answer but recognize that several of the parts have no single correct answer.
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If Orion Industries has $150,000 in debt and $150,000 in equity, then which of the following is true? Options: a) The return on equity ratio is 1. b) The debt-to-equity ratio is 1. c) The return on assets ratio is 0.5. d) The firm has too much debt.