Answer:
Cost of capital = 12.40%
Explanation:
given data
cost of equity = 15.4 percent
pretax cost of debt = 8.9 percent
debt-equity ratio = 0.46
tax rate = 34 percent
to find out
What is the cost of capital for this project
solution
first we get Equity multiplier that is express as
Equity multiplier = 1 + debt-equity ratio ..................1
put here value
Equity multiplier = 1 + 0.46
Equity multiplier = 1.46
and
Weight of equity will be
Weight of equity = 
....................2
put here value
Weight of equity = 
Weight of equity = 0.6849
and
Weight of Debt will be here
Weight of Debt = 1 - weight of equity ...........................3
put here value
Weight of Debt = 1 - 0.6849
Weight of Debt = 0.3151
so
Cost of capital will be here as
Cost of capital = Weight of Debt × pretax cost of debt × (1- tax rate ) + cost of equity × Weight of equity .....................4
put here value we get
Cost of capital = 0.3151 × 8.9% × (1 - 0.34) + 15.4% × 0.6849
Cost of capital = 12.40%
To record the retirement of bonds we have to debit the bond payable account with $435,376, debit the interest account with $22,914, and credit the cash account with $458,290.
The retirement of the bond takes place when they are required to be redeemed before they mature. In other words, if the company wants to buy back its bonds before the period of the bond is over. Sometimes the company will also have to pay the interest amount that is due on the bond to the bond-holder.
The bondholders are creditors of the company. These are the people to have loaned money to the company and who the company has to pay back either at maturity or when the company wants. This should be specified to the bondholder before issuing him the bond. The transaction that will be written to record the transaction will be:
Bonds Payable a/c Dr. 435,376
Interest a/c Dr. 22,914
To cash a/c 458,290.
(Being the bonds retired and interest amount paid)
Learn more about the retirement of bonds here:
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False. It involves the ability to take charge of things or starting/doing things independently on ones own.
Answer:
The answer is True.
Explanation:
From the description, it seems that World Extraction Corp is behaving in a socially responsible way – even though its stakeholders might not have the same view. Though in the long run, a company which behaves in socially responsible manner might accumulate enough goodwill from the society around it to be perceived with a good reputation, stakeholders who do not fit the company’s vision might end up being detrimental to the company’s business.
To ensure that plans are moving in the right direction, managers can use the "Planning/control cycle".
Planning/control cycle refers to the arranging which is set under a way in which there are motion activities or exercises to achieve the arranged objective. Control works direct and screen exercises for deviations from plans (i.e., accomplishment of goals). Planning utilizes input from controls to enhance/change designs and actualize correct activities where they are fundamental.
