Debt-total asset ratios-greater return on equity

Assignment Help Financial Management

Reference no: EM131048196

Erik, Inc. and James, Inc. have debt-total asset ratios of 60 percent and 40 percent and returns on total assets of 20 percent and 30 percent, respectively. Erik has a greater return on equity?explain your reason.

Reference no: EM131048196

Questions Cloud

What was the percentage change in the price of the bond : A company issues a ten-year bond at par with a coupon rate of 6% paid semi-annually. The YTM at the beginning of the third year of the bond (8 years left to maturity) is 7.8%. What was the percentage change in the price of the bond over the past two ..

A cultural difference between client and therapist : Question3 Jimmy, a therapist, realizes that, based on his upbringing, he has some negative beliefs about African-Americans. Which multicultural competency is he exhibiting?

A stock returns beta measures : A stock returns beta measures:

Add the same dollar amount of value to the firm : The investment in project A is $1 million, and the investment in project B is $2 million. Both the projects have a unique internal rate of return of 20 percent. Both the projects will add the same dollar amount of value to the firm. Do you agree? Exp..

Debt-total asset ratios-greater return on equity : Erik, Inc. and James, Inc. have debt-total asset ratios of 60 percent and 40 percent and returns on total assets of 20 percent and 30 percent, respectively. Erik has a greater return on equity?explain your reason.

What distinguish groups from teams in terms of distinguishes : What distinguishes groups from teams in terms of characteristics, tasks, cohesion, performance accountability and other important aspects.

What is the cost of goods sold for the firm : Bryan Corporation has current liabilities of $340,000, a quick ratio of 1.8, inventory turnover ratio of 4.2, and a current ratio of 3.3. What is the cost of goods sold for the firm?

Project be accepted if required rate of return : Luke Coal Mining, Inc. is considering opening a strip mine, the cost of which is $4.4 million. Cash flows will be $27.7 million, all coming at the end of one year. The land must be returned to its natural state at a cost of $25 million, payable after..

About the weighted average cost of capital : ABC Inc. borrows money at 8%, sells bonds at 7%, and the purchasers of common stock require 14% rate of return. If the company has borrowed $40 million, sold $60 million in bonds, and sold $100 million worth of common stocks, what is the Weighted Ave..

User Account

All Pages