What are the consequences of poor internal equity? 2- What are the consequences of poor external equity? 3- How can pay grades help prevent internal equity problems?

Q: LO3 Discuss the discounted payback rule and some of its shortcomings. LO4 Explain accounting rates…

A: The payback period is the amount of time it takes for the investment's benefit to recoup its cost,…

Q: A lender is a creditor. Group of answer choices True False

A: Hi student Since there are multiple questions, we will answer only first question.

Q: A borrower who takes out a loan usually has better information about the potential returns and risks…

A: Effective risk management strategies and mechanisms, such as thorough due diligence and monitoring,…

Q: What is the value of equity? And how to answer that question with only information on assets and…

A: Valuation is referred as the quantitative method to estimate the fair value of an assets or a…

Q: 3. How do earnings management practices affect the quality of earnings?

A: Earnings quality:   The term earnings quality considers whether the earnings of the company are…

Q: What about the recapitalization part in the question? Does that not effect total equity

A: Before recapitalization,the unlevered value of the firm is $500,000,000 or $500 million. Unlevered…

Q: The cost of marginal bad debts is found by taking the difference between the levels of bad debts…

A: Bad debt refers to the loans or amount that can no longer be recovered as the person has lost all…

Q: a) Discuss the measures stakeholders undertake to minimize the costs of equity

A: The cost of equity is the rate of return that a corporate entity requires to determine whether or…

Q: What is meant by positive financial leverage?  What about negative financial leverage?

A: Leverage -It refers to the use of source of funds  for which the firm has to pay a fixed cost.

Q: r to pay un

A: Horizontal analysis :  Financial analysts use horizontal analysis, also known as trend analysis or…

Q: Which of the following is not an approach to replacement analysis? Solve, a. Cash flow approach b.…

A: Replacement analysis is the study of organizing, reasoning and implementation of successful…

Q: Which is risk in the context of financial decision making and performance? Does performance…

A: Risk in the perspective of financial decision making and performance differs as the company faces…

Q: Hi there, able to example of the Cost of debt part (a) if we didnt use Excel to formulate what is…

A: Cost of debt is denoted as the yield to maturity (YTM) of the bonds as it is the interest amount…

Q: The purpose of financial markets is to bring borrowers and savers together. True False

A: Financial Market- The financial market of a country is the marketplace where all the financial…

Q: A ______________ factor of credit policy effects occurs when a firm which institutes a credit policy…

A: There are different variables related to the credit policy of a company. These variables are -…

Q: Indicate what impact the following adjustments have on the accounting equation, Assets = Liabilities…

A: An accounting equation refers to a mathematical representation of the transaction. It indicates that…

Q: How do lenders’ and borrowers’ requirements differ? How can financial intermediaries bridge the gap…

A: Lenders' requirements: The minimization of risk This includes the minimization of the risk of…

Q: Do I have to add the liabilities and equity in order to get the assests?

A: Finding the missing amount:a) Calculate the asset:

Q: Does leasing lead to increased credit availability?

A: Answer: Leasing is a mechanism by which the company may receive such capital assets for use, through…

Q: Briefly explain the over-investment problem from the perspective of the agency costs between…

A: Firms with both the debt and equity in the capital structure often face agency conflicts between…

Q: For the year ended December 31, 2019, Settles Inc. earned an ROI of 8.0%. Sales for the year were…

A: Formula: ROI = Net income / Average total Assets Division of Net income with Average total Assets…

Q: How one determines where to borrow or not? What factor into the decision making process?

A: The act of borrowing money or the sum of money borrowed by an individual, company, government, or…

Q: The payback rule is generally most useful when:

A: The payback period is the time taken to recover the money spent on the project. According to the…

Q: Why are people willing to pay financial intermediaries their transaction costs, at our expense?

A: The question is based on the concept of function and operation of intermediaries in financial…

Q: In general, what is true of people's risk aversion for changes in income that are marginal (i.e.,…

A: Risk Aversion: It is the propensity of individuals to favor results with low vulnerability to those…

Q: What is Fair Value Accounting? 2. What are the factors contributing toward the trend of fair value…

A: What is Fair Value Accounting? Fair value accounting is a financial reporting method where assets…

Q: How does/can a financial intermediary reduce the risk facing them due to Adverse Selection?

A: The question is based on one of the key issue in financial market, banking industry,  about the…

Q: Is excess liquidity a serious issue? Would insufficient liquidity be much worse? Please discuss

A: Excess liquidity means that the company is holding excess assets in cash or liquid instruments that…

Q: What are the problems of too much or too little liquidity?

A: If the available liquidity is more than the required amount then such an excess is called Excess…

Q: Why is it often difficult for the averageinvestor to take advantage of underpricing?

A: Under Pricing of the stock refers to the situation when the current market price of the company’s…

Q: What are opportunity costs? Explain why opportunity costs are not recorded in financial accounting…

A: The advantage that was forfeited by not selecting an option is known as the opportunity cost. The…

Q: which ratio is of greater interest to the owner-manager, the rate of return on total assets or the…

A: The ratio refers to the measure that determines the relation between two numbers. In accounting, the…

Q: Zach Company owns 45% of the voting stock of Tomas Corporation and uses the equity method in…

A: Under equity method, company records investment as an asset and records the income received from the…

Q: What does mangment want to achieve when it tries to "ensure liquidity" and  "maintain solvency "?

A: Companies do maintain sufficient liquidity to maintain the day-to-day operations of the entity. It…

Q: What are the main risks that credit ratings reflect? Do we need credit ratings? What are the…

A: The credit ratings reflect these main risks :  Credit risk or Repayment risk Liquidity risk  Market…

Q: In a margin account, the interests should be higher than the returns. TRUE OR FALSE?

A: In a margin account, the investor borrows from the broker. So, it is not necessary that the interest…

Q: Why is granting credit riskier in an international context?

A: The term credit refers to selling goods on credit by the business top its customers i.e. instead of…

Q: Explain in detail the difference between accounting value and market value.

A: The objective of this question is to understand the difference between accounting value and market…

Q: What factors are frequently ignored in financial analysis? Why?

A: Qualitative factors are the factors that deal with an intangible as well as inexact information that…

Q: 4. There is a difference in return on Total Assets and the return on Total Equity. a. What is the…

A: a. The difference between the return on Total Assets and the return on Total Equity is that the…

Q: Does collateral reduces moral hazard by borrowers? Why?

A: Introduction: A collateral asset is an asset that a lender accepts as payment for a loan. Depending…