Firm is considering actions which will raise its debt ratio

Assignment Help Financial Management

Reference no: EM131898717

A firm is considering actions which will raise its debt ratio. It is anticipated that these actions will have no effect on sales, operating income, or on the firm's total assets. If the firm does increase its debt ratio, which of the following will occur? a. ) Return on assets will increase. b) Times interest earned will increase. c) Profit margin will decrease. d) Total assets turnover will increase.

Reference no: EM131898717

Questions Cloud

What should be the weight of your investment : what should be the weight of your investment in ABC?

Compounded semi-annually : Sarah will deposit $1,000 into an account every six months for 15 years. Assume an interest rate of 14% p.a. compounded semi-annually.

Negative real returns on their loans to the treasury : Why is it that under current market conditions market participants are willing to accept negative real returns on their loans to the Treasury?

One-time loan to cover rent expenses : If you wanted to take a one-time loan to cover rent expenses, how much would you have to borrow?

Firm is considering actions which will raise its debt ratio : A firm is considering actions which will raise its debt ratio. It is anticipated that these actions will have no effect on sales, operating income,

Cash flow estimation problems : The Campbell Company is evaluating the proposed acquisition of a new milling machine. If the project’s cost of capital is 12%, should the machine be purchased?

Boeing and the recruiting of the government purchasing agent : Boeing and The Recruiting Of The Government Purchasing Agent and Kodak, the Appraiser, and the Assessor: Lots of Backscratching on Valuation

Constant over the project ten-year expected operating life : Revenues and other operating costs are expected to be constant over the project's 10-year expected operating life.

Using discounted free cash flow approach : We need to estimate the value per share of a corporation using a discounted free cash flow (FCF) approach and the following data:

User Account

All Pages