Sen Corp., a publicly-traded, mid-cap company, wanted to obtain $30 million in new capital to expand its Iowa plant. Cost of capital was a factor in making the decision. Sen Corp. could either issue new preferred stock or new debentures. Sen Corp.'s underwriter estimated that preferred stock should have an annual dividend payout of $6 and an issue price of $103 per share. The debentures should have a coupon interest rate of 9% and an issue price of $101. Sen Corp.'s marginal income tax rate was 40%.

Required:
What approaches describes Sen Corp.'s best strategy?

Answers

Answer 1

Based on the information given, the approach that describes the strategy that was used by the company is that Sen Corp. should issue the debentures since the after-tax cost of debt (5.347%) would be less than the cost of equity (5.825%).

A debenture simply refers to the rule of bond that's unsecured by collateral. Debentures typically rely on the reputation of the issuer.

From the complete information, the company wants to obtain $30 million in new capital to expand its plant. Therefore, it's appropriate to issue the debentures since issue the cost of equity is more than the after-tax cost of debt.

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Related Questions

what would be the best organizational strategy to use for an essay instructing someone how to bake cupcakes

Answers

The best organizational strategy to use for an essay instructing someone how to bake cupcakes is chronological order.

Chronological order refers to be arrangements with respect to time from the earliest time to the latest time.

This means, the instructor will start giving instructions on how to bake cupcakes from measurements of flour, sugar, butter and other things to mixing the ingredients.

Thereafter, the instructor writes on the oven temperature to bake the cake until when the cake is fully baked.

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Based on business management, Chronological order would be the best organizational strategy to use for an essay instructing someone how to bake cupcakes.

This is because a Chronological order as an organization strategy would explain how a baker or business owner would get things done accordingly.

For instance, it should state the things to get ready such as utensils, ingredients, and other tools necessary.

It will then follow with how to prepare the cupcake, starting from the first thing to do till final action to make the cupcake tasty and yummy.

Hence, in this case, it is concluded that the correct answer is "Chronological Order."

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how often should a financial checkup be completed

Answers

Answer:

a financial checkup should be completed annually.

What is an example of good workstation ergonomics?

Elbows closed
Seat too high
Straight neck and back
Wrists bent

Answers

Answer:

Back should be straight with a slight lordosis (inward curve) in the lower spine. Neck and head upright (ears aligned with your shoulders) Shoulders should be pulled back but relaxed. No twisting or leaning on one side.

A Smart sets up a new business. Before he actually sells anything, he has bought motor vehicle for $2500, premises for $4500, stock of goods for $1000. He did not pay full for his stock of goods and still owes $600 in respect to them. He borrowed $2800 from J Devan. After the events described and before trading starts, he had $150 cash in hand and $650 cash at bank. You are required to Calculate the Capital. Show all working.

Answers

The capital for A Smart is $5,400

Capital is computed as :

Capital = Asset - Liabilities

First, we need to determine the Asset.

Asset = Motor vehicle + Premises + stock + cash in and + cash at bank

Asset = $2,500 + $4,500 + $1,000 + $150 + $650

Asset = $8,800

Also, we will determine the liabilities

Liabilities = Money owed + Loan

Liabilities = $600 + $2,800

Liabilities = $3,400

Recall that:

Capital = Assets - Liabilities

Capital = $8,800 - $3,400

Capital = $5,400

Therefore, the capital for A Smart is $5,400

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if you have to decide to claim a credit or deduction on your taxes which should you take everfi

Answers

It should be noted that based on the information given, the appropriate one to choose will be a tax credit.

A tax deduction simply means the deduction that lowers the tax liability of an economic entity by lowering the taxable income.

If an individual wants to decide to claim a credit or deduction on their taxes, the one that should be chosen will be a tax credit. This is because it directly reduces the tax of the individual.

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An appraiser completes an appraisal for a homeowner in preparation for obtaining a loan. The appraiser provides a letter report and sends a bill for his preparation of the appraisal. He bases the cost of his work on a percent of the amount of the value his opinion finds. What is the situation here

Answers

The situation here is that the appraiser is:

Taking a percentage for his services from the appraisal

Based on the given question, we can see than when an appraisal is made, the appraisal which is actually a written report that makes an estimate of the present value of a piece of property.

With this in mind, we can see that the appraiser preferred to take his payment from the percentage value of the value of the property which he appraised. This method is sure to give the appraiser more money than he would have made, especially if the value of the property was quite high.

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Each department within an organization should develop a _______ strategy to outline how the department will improve its ability to perform task-specific activities in ways that add value to the organization's goods and services.

Answers

The type of strategy that each department within an organization develop  to outline how the department will improve its ability in order to perform specific tasks in contributing value to the goods and services of the organization is: functional level strategy.

What is Functional Level Strategy?Functional level strategies can be defined as the goals and actions that are assigned to each department in an organization.The goals and actions in functional level strategy of every department are to support the business organization's business level and corporate level strategies.  They form part of the daily operations of the various specific departments of the business organization.

Therefore, the type of strategy that each department within an organization develop  to outline how the department will improve its ability in order to perform specific tasks in contributing value to the goods and services of the organization is: functional level strategy.

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What is stopping to reflect on and judge your goal progress called?

Answers

Answer: Self-Reflection

The stopping to reflect on and judge your goal progress is called Re-evaluation.

What is a Goal?

A goal is to refer to an objective or dream that an individual desires to achive in his life. This is referring to a target based on an individual's desire which is accomplished by them in the desired time period.

The process of re-evaluation emphasizes determining or analyzing all the aspects of an individual's personality or business again by following different methods in order to achieve the desired result.

In order to assure a more likely outcome, it is crucial to do the experiment more than once which helps to better evaluation. Otherwise, there is a risk that the results could be incorrect.

This re-evaluation helps to seek progress in the work and brings improvement based on the results to achieve the desired Output.

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Price floors usually result in ___________________.

Answers

The result of the price floor is that the quantity supplied, Qs, exceeds the quantity demanded, Qd. There is excess supply, also called a surplus
That’s what I found

When Frozen DeLites Ice Cream moved from its longtime storefront to a famous resort area, it took a big risk. However, the owners were confident that its unique ice cream treats would win customer raves. Fortunately, one of the members of the family business was convinced the shop needed to stay in touch with its customers. Frozen DeLites collects names and email addresses of its customers and maintains a presence on a few social media sites in order to send messages about promotions and coupons to valued customers.

Marketing professionals refer to this strategy as: _________

Answers

Marketers professionals refer to the strategy of collecting customer names and email addresses and maintaining a presence on social media sites to send messages about promotions and coupons to valued customers like relationship marketing.

This strategy of creating relationships with customers has as its main objective the generation of value and customer loyalty through a closer and more direct relationship.

Relationship marketing is a strategy that has had a greater impact with technological development, social media for example, has strengthened communication between company and customer, making the relationship closer and more dynamic.

Therefore, companies that use relationship marketing create value through content that generates benefits and customer engagement with the company, increasing loyalty and positioning in the market.

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most e-commerce actually takes place between businesses. what is this called?

Answers

OUR MATCHLESS HOLY TRUE LIVING SAVIOUR  CHRIST JESUS LOVES US ALL. OUR MATCHLESS HOLY TRUE ING CREATOR LOVES YOU . CONTINUE TO HAVE A BLESS DAY, WEEK, MONTH, AND YEAR.

Business-to-business (B2B) e-commerce refers to the electronic exchange of products, services or information between businesses rather than between businesses and consume.

In AHP procedure, can you explain the reason why we need to check the consistency and briefly explain the method of consistency checking?

Answers

In AHP Procedure, the reason why we need to check the consistency is:

To make sure that the pairwise comparison results are accurate

The brief explanation of the method of consistency checking is:

The weights of the individual elements are are calculated using pairwise comparison so that there would be a comparison of two advantages

The AHP which means Analytical Hierarchy Process has to do with the organization of the various processes that is responsible for the analysis of complex decisions making use of mathematics and psychology.

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which are considered types of credit availablesto borrowers?check all that apply

Answers

Answer:

choices?

Explanation:

ALL of the following are advantages of labour intensive production EXCEPT:

Skilled workers take time to train

Workers are often more motivated

Less expensive machine cost

Humans can use their initiative to solve problems

Answers

Answer:

skilled workers take time to train

Explanation:

this means that a lot of time is spent on training which te would have been invested in production

Skilled worlds take time to train. This would take away from their time

What is the Federal Reserve System able to do?

A. Mandate that the government create new jobs

B. Provide loans to individuals

C. Provide loans to banks

D. Encourage individuals to spend more money

Answers

Answer:

c

Explanation:

The federal reserve systems responsibilities include influencing the supply of money and credit to banks

Salmon, Incorporated issues 500,000 shares of preferred stock for $60 a share. The stock has a fixed annual dividend rate of 5% and a par value of $18 per share. The current price of the preferred stock is $64 a share. If sufficient dividends are declared, preferred stockholders can anticipate receiving annual dividends of: _________

Answers

If sufficient dividends are declared, preferred stockholders can anticipate receiving annual dividends of: $0.90 per share.

Using this formula

Annual dividends= Par value × Fixed Annual dividend rate

Where:

Par value= $18 per share

Fixed Annual dividend rate= 5% or 0.05

Let plug in the formula

Annual dividends= $18 per share × 0.05

Annual dividends= $0.90 per share

Inconclusion if sufficient dividends are declared, preferred stockholders can anticipate receiving annual dividends of: $0.90 per share.

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ALL of the following are reasons firms change from labour intensive to capital intensive EXCEPT:

Quality
Finance
Technology
Quantity

Answers

Answer:

quantity.

Explanation

terms will change from labor-intensive to capital-intensive to increase the efficiency of Labor which will ultimately result in the increase production

Answer:

Quantity

Explanation:

Whether they implement more labours or decrease the amount of labours it hardly matters the production or quantity of production

So option D is correct

One of the most popular and effective ways to teach students are known as S.M.A.R.T goals. S.M.A.R.T is an acronym that stands for specific, measurable, achievable, relevant, and timely.

a. True
b. False

Answers

a. True.

S.M.A.R.T is an acronym that stands for “Specific, Measurable, Achievable, Relevant, and Timely”.

When price goes up, what happens to supply?

Answers

the supply expands

Explanation:

when price goes up supply usually increases. because the more money it cost the less likely it is to be bought by the consumer therefore instead of selling say… 100 products a day, you’re down to 60

which government website lists walt disney, bing crosby and charles lindbergh as former employees? irs nasa cia usps

Answers

The government website in which it is listed that the aforementioned names were employees is the USPS.

The United States Postal Service:

Employed Walt Disney as a postal carrier in 1918Employed Bing Crosby as a post office counter Employed Charles Lindbergh as an airmail pilot

The USPS website can therefore confidently claim that at some point or the other, all three names mentioned above used to work for them.

In conclusion, the correct answer is the USPS.

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plz help if ur good at taxes

Answers

Answer:

pay: 73,300

income tax: 73,300*0.37 = 27,121

EI: 73,300*0.0173=1,268.09

CPP: 2,590

Yearly Pay will be 73,300-27,121-1,268.09-2,590 = $42,320.91

Weekly pay (paycheck) = 42320.91/52 = $ 813.86

Explanation:

Tom, a customer care executive, receives an order of 25 personal computers from a customer who wants the goods to be delivered to him in two days. Tom needs to inform the customer of that there will be a delay in shipping goods in bulk in such a short span of time. In order to maintain trust, Tom should: _________

a. update the customer only when they enquire on the delay in the shipment.
b. update the customer regarding the delay as per his own convenience.
c. update the customer regularly and keep the customer informed of any further delay
d. update the customer only when he or she raises a complaint regarding non-receipt of goods.

Answers

Answer:

b. update the customer regarding the delay as per his own convenience.

Based on the given information, Tom should update the customer regarding the delay at his own convenience. Thus the correct option is B.

What is a Customer?

A customer is referred to as an individual who purchases a product or service. He may or may not be the consumer. A consumer refers to a person who utilizes or consume goods and service.

In the given case, it is explained that A customer orders 25 personal computers for Tom, a customer service representative, and requests that the items be delivered to him in two days.

Now it is observed that the order is getting delayed, in order to maintain trust with the customer he should inform the client of the delay at his earliest possible opportunity to avoid any dissatisfaction among customers.

Customer satisfaction is the key to the success of any business which can be achive through better customer service. If any delay is caused it is better to inform than to create any misunderstanding or confusion for later.

Therefore, option B is appropriate.

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one difference between monopolistic competition and oligopoly is that firms in monopolistic competition are assumed to:

Answers

Answer:

Monopolistically competitive firms are assumed to independently set the price of their differentiated product.  

Explanation:

Monopolistic competition and oligopoly are two types of market structure.

Definitions:Monopolistic competition

Monopolistic competition is characterized by several competing sellers in an industry with differentiated products. In this market structure, monopolistically competitive firms have lesser barriers to entry or exit. Additionally, the consumers view the monopolistically competitive firms' products as somewhat different from the goods produced by competing firms. However, the consumers view those competing products as close substitutes.  Thus, product differentiation is crucial in the success and longevity of monopolistically competitive firms.  Product differentiation is the process of attracting customers by creating a feature or image that will make a product stand out or distinguishable from the existing products in the market.  Through product differentiation, monopolistically competitive firms can have some control over setting prices on their products, which gives them limited market power.  Although, the amount of products that the firms could sell is also contingent on the number and prices of existing substitute products in the market.

Oligopoly

In contrast, oligopoly is a type of market structure characterized by a handful of major producers that have the power to influence to set the prices of their goods through price leadership.  The actions taken by an oligopolist may significantly affect the sales of other firms in the same industry—when a leading oligopolistic firm increases its price, the other firms will likely follow suit. Hence, the prices of comparable goods are often similar.  

Under this market structure, firms have a cost advantage compared to smaller firms due to increasing returns to scale. This means that the oligopolists could produce their products in larger volumes using lesser inputs.  It is also difficult for new entrants to enter an oligopolistic industry due to lack of sufficient capital investment.  

It takes six weeks for a tire order to be delivered to the Auto & Tire Center in the Walmart Supercenter in Wisconsin. Tires are ordered every five weeks. Currently, there are 90 tires on hand and another 340 on order. Sales are expected to use 120 tires per week and the department maintains a reserve of 40 tires. It's time to reorder tires.
How many tires is the department open to receive?
If the tires that are ordered cost the company $43 per tire, and the retail price of the tires is determined by marking up the cost by 57%, what is the total retail value of the tires being ordered?

Answers

The department should be open to receive 760 tires with a total retail value of $51,307.60.

Data and Calculations:

Beginning inventory = 90

New order of tires = 340

Total units available = 430 (90 + 340)

Sales of tires per week = 120

Expected ending inventory = 40

Therefore, the number of tires the department should be open to receive is 760 (40 + (120 x 6).

Cost per tire = $43

Markup = 57%

Retail price per tire = $67.51 ($43 x 1.57)

Thus, the total retail value of the 760 tires being ordered is $51,307.60.

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How might a recent college graduates investment portfolio differ from someone who is nearing retirement?

Answers

Answer: someone who is retiring has more experience on what to invest in than someone who is still getting used to knowing what to invest in

Explanation:

For a broker to have affiliates, real estate must be the broker's main occupation and the broker must be

Answers

Answer:

financially stable.

Explanation:

must have financial capabilities

If you were a cosmetologist working in a spa and were 15 minutes late for your first appointment, how would that impact those you work with and the clients of the spa?

Answers

Considering the situation described above, the impact a 15 minutes lateness would cause those I work with and the spa's clients are "negative."

Who is a cosmetologist?

A cosmetologist is a professional or permitted to deliver cosmetic treatments to the hair, skin, and nails.

Should a cosmetologist be late on his first appointment, such a person would delay the work of others he works with and delay the clients to get their work done on time.

Also, such lateness might change the mind of clients and those he works with towards him as unprofessional.

Hence, in this case, it is concluded that the impact would be negative.

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human resources is the basic resources for an office,clarify this statement.​

Answers

An HR department is tasked with maximizing employee productivity and protecting the company from any issues that may arise within the workforce. HR responsibilities include compensation and benefits, recruitment, firing, and keeping up to date with any laws that may affect the company and its employees.

In simplest terms, the HR (Human Resources) department is a group who is responsible for managing the employee life cycle (i.e., recruiting, hiring, onboarding, training, and firing employees) and administering employee benefits.

Bill wants to prepare his own taxes but wants a bit more guidance. He wants to file taxes without having to spend much money. What is his BEST option for filing taxes?

A. Prepare his taxes on her own.

B. Prepare his taxes with using an electronic tax program.

C. Hire someone to prepare his taxes.

Answers

Answer: B. Prepare his taxes with using an electronic tax program.

Explanation: had this question and got it correct!

If Congress lowered taxes, then the FED would

Answers

Answer: A decrease in taxes has the opposite effect on income, demand, and GDP. It will boost all three, which is why people cry out for a tax cut when the economy is sluggish. When the government decreases taxes, disposable income increases. That translates to higher demand (spending) and increased production (GDP).

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