Answer:
d. decrease the firm's WACC.
Explanation:
As per WACC formula
WACC = ( Weight of Common Equity x Cost of Common Equity ) + ( Weight of Common Debt x Cost of Common Debt x ( 1 - Tax rate ) ) + ( Weight of Preferred Equity x Cost of Preferred Equity )
By assuming the values to prove the answer
Weights
Common equity = 55%
Preferred Equity = 15%
Debt = 30%
Costs
Common equity = 15%
Preferred Equity = 8%
Debt = 12%
Tax rate is 15%
Placing values in the formula
WACC = ( 55% x 15% ) + ( 30% x 12% x ( 1 - 15% ) ) + ( 15% x 8% )
WACC = 8.25% + 3.06% + 1.2% = 12.51%
Keeping others values constant, Now increase the Tax rate to 25% and placing vlaues in the formula
WACC = ( 55% x 15% ) + ( 30% x 12% x ( 1 - 25% ) ) + ( 15% x 8% )
WACC = 8.25% + 2.7 + 1.2% = 12.15%
Hence the WACC is decreased from 12.51% to 12.15% when the tax rate is increased from 15% to 25% keeping other values constant.
Answer:
Employers will look to see which workers are applying themselves. They want workers who are flexible, have good attitudes, are loyal to their company, practice good judgement, and are unselfish. Workers who go out and do work that is not formally assigned to them and expand the scope of their responsibilities are rewarded with promotions. Workers who maintain extensive professional networks and learn new skills are also prime candidates for promotion.
Answer from the person who asked the question.
Answer:
$40,000
Explanation:
We can calculate recognized gain on the transfer and basis for his stock just by deducting adjusted basis value from liability on the transfered real estate.
Calcuation
iability on the transfered real estate $300,000
less: adjusted basis value ($260,000)
Gain recognized $40,000
Answer:
a. $17.44 per hour
b. $43,600 ; $104,640
Explanation:
The computation is shown below:
a. Single plantwide overhead rate equals to
= Total Overhead Amount ÷ Budgeted Direct Labor Hours
where,
Total overhead amount is
= $625,000 + $900,000 + $105,000 + $175,000 + $300,000 + $75,000
= $2,180,000
And, the budgeted direct labor hours is 125,000
So, the overhead rate is
= $2,180,000 ÷ 125,000
= $17.44 per hour
2. Now the overhead cost is
For Deluxe model
= 2,500 direct labor hours × $17.44 per hour
= $43,600
For basic model
= 6,000 direct labor hours × $17.44 per hour
= $104,640
Answer:
Debit Land $94,000; credit Common Stock $62,000; credit Paid-In Capital in Excess of Par Value, Common Stock $32,000
Explanation:
Preparation of what The entry to record this exchange is:
Debit Land $94,000
Credit Common Stock $62,000
(6,200*$10)
Credit Paid-In Capital in Excess of Par Value, Common Stock $32,000
($94,000-$62,000)
(To record exchange)
