An n × m matrix, when multiplied by an m × p matrix, yields an n × p matrix
Indicate whether the statement is true or false
TRUE
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Exposure at the operations level caused by FX changes on projected cash flows is known as ____________ exposure.
Fill in the blank(s) with the appropriate word(s).
The ultimate economic burden of a tax is best captured by:
A. the effective tax rate. B. the proportional tax rate. C. the average tax rate. D. the marginal tax rate. E. None of the choices are correct.
Production cost reports prepared using first-in, first-out (FIFO) method determine the average cost of equivalent units of production by combining beginning inventory costs with current period costs
Indicate whether the statement is true or false
In this problem, we admit only one real-world factor in an otherwise ideal capital market. This real world factor is corporate taxation; specifically that interest payments on debt are deductible while dividend payments are not deductible
Suppose Delaware East, Inc has until now been an all-equity firm with a market value of $100 mn. Now, the firm decides to increase its leverage by issuing $40 mn. in debt, with the proceeds being used to pay a dividend to shareholders. Assuming that this debt will be a permanent part of the firm's capital structure, and that the firm's tax rate is 34%, and accounting for the deductibility of the interest on the debt, what is the total market value of the firm after the recapitalization? a. $113.6 mn. b. $100 mn. c. $73.6 mn. d. $13.6 mn. FORMULA: VL=VU+?cD