Calculating the Probability of Bankruptcy a Linear Probability Model You

question 6

Multiple Choice

Calculating the Probability of Bankruptcy A linear probability model you have developed finds there are two factors influencing the past bankruptcy behavior of firms: the debt-to-equity ratio and the profit margin. Based on past bankruptcy experience, the linear probability model is estimated as: PD_i = .02 (debt/equity) + .80 (profit margin)
A firm you are thinking of lending to has a debt-to-equity ratio of 110 percent and its expected probability of default, or bankruptcy, is estimated to be 8 percent. If sales are $2 million, calculate the firm's net income.

• A) $145,000
• B) $165,000
• C) $160,000
• D) $200,000

Understand the framing of sexual harassment experiences and the discourse surrounding them.

Evaluate the roles and challenges of feminism in achieving policy changes and societal shifts.

Understand the diversity and complexity of masculinity.

Recognize patterns of homosocial reproduction in organizational settings.

---

Definitions:

June 10

A specific calendar date that can hold significance for various historical, cultural, or personal events, depending on the context.

1985

A year notable for significant global events, including the ascent of Mikhail Gorbachev to power in the Soviet Union and the release of the Microsoft Windows operating system.

Office Manager

An individual responsible for overseeing the administrative activities within an office environment, ensuring its smooth operation.

Hardware Store

A retail business specializing in selling tools, building materials, and home improvement items.