Answer:
Option (C) is correct.
Explanation:
We have to use MM proposition that cost of equity will change itself in such a manner so that it can take care of its debt.
Cost of equity:
= WACC of all equity firm + (WACC of all equity - Cost of debt ) × (Debt -to-equity ratio)
At the beginning, when there was no debt,
WACC = cost of equity = 12 %
Levered cost of equity:
= 12% + ( 12% - 6%) × 0.5
= 15%
Therefore, Rearden's levered cost of equity would be closest to 15%.
The correct answer would be D
Answer:
The correct answer is A
Explanation:
Sunk cost is the cost which is incurred by an entity and that can no longer be recovered. It is that cost which is not considered when making the decision to continue investing in the online project as it cannot be recovered.
In this case, city of Tustin incurred $10 million on the project for building a new community college and further it require $40 million to finish the project. The economist told the city council to ignore $10 million because it is a sunk cost which cannot be recovered.
Answer:
The correct answer is real cost.
Explanation:
The real cost of attending a concert includes both explicit as well as an implicit cost. The explicit cost is the direct cost paid out of pocket. For instance, the cost of concert tickets, transport cost, cost incurred on food and beverages, etc are the direct or explicit cost.
The implicit costs are the indirect costs which are not directly incurred. The main example of implicit cost is the opportunity cost of attending the concert. Opportunity cost is the cost involved in sacrificing the alternative. For instance, if a person is taking leave from work then the wages that he/she could have earned is an opportunity cost.
Answer and explanation:
<em>Check the attached file for a well formatted answer</em>
Headland Company
Pension worksheet 2020-2021
General Entries Memo Record
Items Annual Pension expense Cash OCI- Prior service cost OCI- Gain/Loss