Epiphany is an all-equity firm with an estimated market value of $400,000. The firm sells $225,000 of debt and uses the proceeds to purchase outstanding equity
Compute the weight in equity and the weight in debt after the proposed financing and repurchase of equity.
A) 0.28, 0.72
B) 0.44, 0.56
C) 0.39, 0.61
D) 0.56, 0.44
Answer: B
You might also like to view...
Which of the following accounting conventions would an accountant most likely apply when facing major uncertainties?
a. Full disclosure b. Conservatism c. Materiality d. Consistency
The Norms established by the Sub-Commission on the Promotion and Protection of Human Rights have three characteristics that distinguish them from previous codes of conduct, including all EXCEPT _______.
a. unify and integrate principles and codes of conduct previously adopted by organizations b. are aspirational in that they identify ideals of transnational corporation behavior rather than minimum standards c. are voluntary, however their implementation provisions require reporting and oversight d. are non-voluntary and are legally binding, with their evidence of this being that their implementation provisions require reporting and oversight.
What are some roles played by people in the problem domain of a restaurant?
Explain two general types of proactive responses that managers and organizations can take to change the environment.
What will be an ideal response?