Economics of Enterprise Answers

Which of the following statements is CORRECT?

a. Typically, a firm’s DPS should exceed its EPS.
b. Typically, a firm’s EBIT should exceed its EBITDA.
c. If a firm is more profitable than average (e.g., Google), we would normally expect to see its stock price exceed its book value per share.
d. If a firm is more profitable than most other firms, we would normally expect to see its book value per share exceed its stock price, especially after several years of high inflation.
e. The more depreciation a firm has in a given year, the higher its EPS, other things held constant.

Companies HD and LD have the same total assets, sales, operating costs, and tax rates, and they pay the same interest rate on their debt. However, company HD has a higher debt ratio. Which of the following statements is CORRECT?

a. Given this information, LD must have the higher ROE.
b. Company LD has a higher basic earning power ratio (BEP).
c. Company HD has a higher basic earning power ratio (BEP).
d. If the interest rate the companies pay on their debt is more than their basic earning power (BEP), then Company HD will have the higher ROE.
e. If the interest rate the companies pay on their debt is less than their basic earning power (BEP), then Company HD will have the higher ROE.

Companies HD and LD have the same tax rate, sales, total assets, and basic earning power. Both companies have positive net incomes. Company HD has a higher debt ratio and, therefore, a higher interest expense. Which of the following statements is CORRECT?
a. Company HD has a lower equity multiplier.
b. Company HD has more net income.
c. Company HD pays more in taxes.
d. Company HD has a lower ROE.
e. Company HD has a lower times interest earned (TIE) ratio.

Give explanation for answer given.

imagine a startup company of your own and briefly trace its development from sole proprietorship to a major corporation with a focus on how that development would be finance.

Suppose the equation for demand can be expressed as P=120-1.25Q. The equation for supply can be expressed as p=1.75Q
A. What is the Quantity demanded at a price of $80
b. What is is the price elasticity of demand between the price of $80 and $60
c. Find the equilibrium price and quantity

How do you determine the size of the M1 money supply for currency 700 billion?

When the price of good X falls from . 10 to . 9, the demand for good Y
Increase from 20 Kg. to 25 Kg.
a) What is the cross elasticity of demand of good Y for good X?
b) Are goods X and Y compliments or substitutes?

q=100+p-0.01p2+2n-0.03n2

determine the marginal rate of technical substitution.