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NEW QUESTION: 1
A company has an EBIT of $4 million, and its degree of total leverage is 2.4. The firm's debt consists of
$20 million in bonds with a 10 percent yield to maturity. The company is considering a new production process that will require an increase in fixed costs but a decrease in variable costs. If adopted, the new process will result in a degree of operating leverage of 1.4. The president wants to keep the degree of total leverage at 2.4. If EBIT remains at $4 million, what amount of bonds must be outstanding to accomplish this (assuming the yield to maturity remains at 10 percent)?
A. $18.5 million
B. $19.2 million
C. $19.8 million
D. $16.7 million
E. $20.1 million
Answer: D
Explanation:
Explanation/Reference:
Explanation:
First, find the new DFL:
DTL = (DOL)(DFL)
2.4 = (1.4)(DFL)
DFL = 1.7143.
Then, find the new interest payments in a year:
DFL = (EBIT)/(EBIT - I)
1.7143 = ($4,000,000)/($4,000,000 - I)
I = $1,666,686.11.
Finally, solve for the new debt level, knowing that the yield to maturity remains at 10%. Debt Value(YTM) = Interest Payment Debt(0.10) = $1,666,686.11
Debt = $16,666,861.11 = $16.7 million.
NEW QUESTION: 2
You have implemented a wireless mesh network. All mesh nodes are properly configured for participation in the same mesh network. Several of the mesh nodes are unable to connect to other mesh nodes. What action may provide a solution to this problem?
A. Change the output power settings only on the faulty mesh nodes
B. Place the faulty mesh nodes in their own mesh network
C. Change the security settings on the faulty mesh nodes
D. Move the faulty mesh nodes to provide for better signal strength
Answer: A
NEW QUESTION: 3
When troubleshooting bridged interfaces, you should start with the show interface VLAN x command. Which two of these should be true of the interface? (Choose two.)
A. it has an MTU set of 1500 bytes
B. it has an IP address and mask
C. it shows mode : routed
D. it is up
E. it shows Assigned from the Supervisor, up on the Supervisor
Answer: D,E
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