Assume a Firm Wants to Hold Its Current Long-Term Debt-To-Equity

question 44

Multiple Choice

Assume a firm wants to hold its current long-term debt-to-equity ratio constant at 0.55 and its payout ratio constant at 35%.The firm neither issues nor repurchases shares.If the firm generates $326,000 of net income,what is the maximum amount that the firm can increase its long-term debt?

• A) $116,545
• B) $95,355
• C) $122,615
• D) $0

Comprehend how concepts and prototypes are formed and used.

Recognize cognitive capacities and communication methods in animals.

Apply appropriate strategies for solving mathematical and logical problems.

Understand the influence of mental set and functional fixedness on problem solving.

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Definitions:

Hypothyroidism

A condition in which the thyroid gland doesn't produce enough thyroid hormone, leading to a slowdown in bodily functions.

PO

An abbreviation used in prescriptions, standing for "per os," which is Latin for "by mouth," indicating oral administration.

Tagamet

A brand name for cimetidine, a medication used to treat and prevent certain types of ulcers and to reduce stomach acid.

Gastric Reflux

The backward flow of stomach acid into the esophagus, leading to discomfort and potential damage.