Conducting research to determine why consumers visit Starbucks is an example of basic business research.
a. true
b. false
The correct answer is a. true
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Real-time processing would be most beneficial in handling a firm's
a. fixed asset records b. retained earnings information c. merchandise inventory d. depreciation records
Gains and losses on derivatives not designated as hedges of a specific risk, gains and losses on fair value hedges, and the ineffective portion of cash flow hedges affect net income simultaneously with changes in fair value
Indicate whether the statement is true or false
Your firm has $500 million of investor-supplied capital, its return on investors' capital (ROIC) is 15%, and it currently has no debt in its capital structure (i.e., wd = 0). The CFO is contemplating a recapitalization where it would issue debt at an after-tax cost of 10% and use the proceeds to buy back some of its common stock, such that the percentage of common equity in the capital structure (wc) is 1 - wd. If the company goes ahead with the recapitalization, its operating income, the size of the firm (i.e., total assets), total investor-supplied capital, and tax rate would remain unchanged. Which of the following is most likely to occur as a result of the recapitalization?
A. The ROA would increase. B. The ROA would remain unchanged. C. The return on investors' capital would decline. D. The return on investors' capital would increase. E. The ROE would increase.
You purchased one share of Sophia Enterprises common stock for $30 today. If the stock pays a dividend of
$6.50 in one year, and sells for $32.50 at that time, what will the dividend yield, growth rate, and total rate of return be for the year? What will be an ideal response?