You Are Considering a Stock Investment in One of Two

question 71

Multiple Choice

You are considering a stock investment in one of two firms (AllDebt, Inc. and AllEquity, Inc.) , both of which operate in the same industry and have identical operating income of $400,000. AllDebt, Inc. finances its $800,000 in assets with $600,000 in debt (on which it pays 5 percent interest annually) and $200,000 in equity. AllEquity, Inc. finances its $800,000 in assets with no debt and $800,000 in equity. Both firms pay a tax rate of 30 percent on their taxable income. What are the asset funders' (the debt holders and stockholders) resulting return on assets for the two firms?

• A) 32.375%, and 35.00%, respectively
• B) 36.125%, and 35.00%, respectively
• C) 46.25%, and 50%, respectively
• D) 50%, and 50%, respectively

Identify the role of mutations and genetic variability in evolution.

Comprehend the significance of biogeographical evidence in supporting evolutionary theory.

Understand the implications of fossil record data for evolutionary history.

Grasp the importance of homologous structures and developmental biology evidence in indicating common ancestry.

---

Definitions:

Marginal Utility

The incremental utility received from the consumption of one more unit of a particular good or service.

Marginal Utility

The increased enjoyment or advantage derived by a consumer from the consumption of an extra unit of a good or service.

Lemonade

A beverage typically made from lemon juice, water, and sugar.

Marginal Utility

The additional satisfaction gained from consuming one more unit of a good or service.