Question: Using a modified discriminant function similar to Altman's, Burger Bank estimates the following coefficients for its portfolio of loans:Z = 1.4X1 + 1.09X2 + 1.5X3where

Using a modified discriminant function similar to Altman's, Burger Bank estimates the following coefficients for its portfolio of loans:Z = 1.4X1 + 1.09X2 + 1.5X3where X1 = debt to asset ratio; X2 = net income and X3 = dividend payout ratio.What is the Z-score if the debt to asset ratio is 40 percent, net income is 12 percent, and the dividend payout ratio is 60 percent?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Using a modified discriminant function similar to Altman's, Burger Bank estimates the following coefficients for its portfolio of loans: Z = 1.4X1 + 1.09X2 + 1.5X3; Where X1 = debt to asset ratio; X2...

Using a modified discriminant function similar to Altman's, Burger Bank estimates the following coefficients for its portfolio of loans: Z = 1.4X_1 + 1.09X_2+ 1.5X_3 where X_1 = debt to asset ratio;...

Q1. RAROC (risk-adjusted return on capital) Models (a) What is the essential idea underlying RAROC models? How does the RAROC model relate to the concept of duration? (b) The duration of a soon to be...

Using a modified discriminant function similar to Altman's, Burger Bank estimates the following coefficients for its portfolio of loans: Z = 1.4X1 + 1.09X2 + 1.5X3 where X = debt to asset ratio; X2 =...

Using a modified discriminant function similar to Altmans, a bank estimates the following coefficients for its portfolio of loans. Z = 1.4X1 + 1.09X2 + 1.5X3 where X1 = debt to asset ratio; X2 =...

$3990 d. $7980 e. $7640 15. The First U.S. National Bank has the following assets and liabilities in its portfolio (figures are market values SIB cash and excess reserves with the Fed (CASH). S3B...

Using a modified discriminant function similar to Altman's, Sunshine Bank estimates the following coefficients for its portfolio of loans: Z = 1.4X1 + 1.09X2 + 1.5X3, where X1 = debt to asset ratio;...

$3990 d. $7980 e. $7640 15. The First U.S. National Bank has the following assets and liabilities in its portfolio (figures are market values SIB cash and excess reserves with the Fed (CASH). S3B...

Using a modified discriminant function similar to Altman's. Burger Bank estimates the following coefficients for its portfolio of loans: Z= l.4X_1 + 1.09X_2 + 1.5X_3 where X_1 = debt to asset ratio;...

Net income reported in the income statement for the current year was $275,000. The depreciation registered in fixed assets and the amortization of patents in the year were $40,000 and $9,000,...

Why business owners should be aware of ICT?

In order to expire air, which of the following must occur? Intrapulmonary volume decreases as the inspiratory muscles and diaphragm relax and return to their resting positions. Intrapulmonary...

Q What is the function of anti-pumping in the circuit breaker?