Laserscope Inc

question 47

Multiple Choice

Laserscope Inc.is trying to determine the best combination of short-term and long-term debt to employ in financing its assets.Laserscope will have $16 million in current assets and $20 million in fixed assets next year and expects operating income (EBIT) to be $4.1 million.The company's tax rate is 40% and its debt ratio is 50%.The firm's debt will be financed by one of the following policies:

What is the return on shareholder's equity under each policy?

• A)aggressive = 12.70% & conservative = 12.22%
• B)aggressive = 8.47% & conservative = 8.14%
• C)aggressive = 4.23% & conservative = 4.07%
• D)aggressive = 7.67% & conservative = 8.81%

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Definitions:

Consumer Market

The marketplace where individuals or households purchase goods and services for personal use.

PRIZM Lifestyle Segmentation

A marketing tool used to categorize consumers into different groups based on their socio-economic status, lifestyle, and consumer behavior.

Demographic Segmentation

The division of a market into subsets based on variables such as age, gender, income, education, and family size for marketing purposes.

Geographic Component

Refers to the elements related to the physical location and spatial characteristics crucial for analysis in geography and related disciplines.