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Author Question: Which of the following statements regarding limited partnership is TRUE? A) There is no limit on ... (Read 33 times)

tingc95

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on: Jul 11, 2018
Which of the following statements regarding limited partnership is TRUE?
 
  A) There is no limit on a limited partner's liability.
  B) A limited partner is not liable until all the assets of the general partners have been exhausted.
  C) A general partner's liability is limited by the amount of their investment.
  D) A limited partner's liability is limited by the amount of their investment.

Question 2

White's World Wide Delivery Inc. has an unlevered beta = 1.25, a debt-equity ratio of 0.30, a tax rate of 0.20, and a levered beta = 1.55. If the firm increased the debt-equity ratio to 50, what would be the impact on the levered beta?
 
  A) Increase to a value of 1.75
  B) No change in value.
  C) Decrease to a value of 1.00
  D) There is insufficient information to make a levered beta estimate.


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eliasc0401

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Reply #1 on: Jul 11, 2018
Answer to Question 1

D

Answer to Question 2

A
Explanation: A) L = (1+(D/E)(1-t)) U
= (1+(.50)(1-.20)1.25 = 1.75.


tingc95

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Reply 2 on: Jul 11, 2018
Gracias!

bbburns21

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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