My instructor posted a message in our classroom that said to show our work on our final and she would give us partial credit if we missed the answer to a problem but used the correct method. The attached spreadsheet shows the answers that I turned in and listed below are the correct answers that she gave. I didn't receive partial credit on these three problems. Please help me explain why I think I should have.
Problem 2: $80,000 + 25,000/25,000 = 4.2 times
Problem 3: 1 - 1.50 = .50 + 1.50 = 2.00 times
Problem 4: b = 1- Payout Ratio = 1 - .20 = .80
ROE = .14
Growth Rate = (.14 x .80)/(1 - .14 - .80) = .1120/.888 = .126 = 12.6%.
See the attached file.
Your argument should be that it was not clear whether you are looking for fixed charges other than interest ratio or total fixed charge ratio. Since interest is also a fixed charge, your interpretation of the question is also correct and you should be considered for partial credit. Interest is a fixed charge....stress this and get the ...
The solution assists with comparing answers to the correct answers and explains why one would not receive partial credits.