You hurt your back at work by falling of a ladder and are out of work for a month

Dinklage Corp. has 8 million shares of common stock outstanding. The current share price is $82, and the book value per share is

Dmitry [639]

Answer:

a. The company's capital structure weights on a book value basis is that the Equity/Value is 0.1584 and the Debt/Value is 0.8416

b. tTe company's capital structure weights on a market value basis is that the Equity/Value is 0.7257 and the Debt/Value is 0.2743

Explanation:

a. According to the given data we have the following:

Book Value of first bond = $135 million

Book Value of second bond = $120 million

Book Value of shares = 8*6 = 48

Therefore, in order to calculate the company's capital structure weights on a book value basis we would have to make the following calculations:

Weight of equity = 48/($135+$120+48) = 0.1584

Weight of debt = ($135+$120)/($135+$120+48) = 0.8416

b. In order to calculate the companyâs capital structure weights on a market value basis, we would have to calculate first the Market Value of first bond and the Book Value of second bond as follows

Market Value of first bond = $135*93% = $125.55 millions

Book Value of second bond = $120* 102% = $122.4 millions

Market Value of shares = 8*82 = 656

Therefore, Weight of equity = 656/(656 +125.55 +122.4) = 0.7257

Weight of debt = (125.55+122.4)/(656 +125.55 +122.4)) = 0.2743

6 0

4 years ago

Write a short memo to Ms Loki explaining the business performance findings of your statement of cash flow.

UkoKoshka [18]

The memo explaining the business performance findings from the statement of cash flow will entails:

address of the receiver
subject of the memo
body of the memo.

<h3>What is a statement of cash flow?</h3>

This refers to the financial statement that shows how changes in balance sheet accounts and breaks the analysis down to operating, investing and financing activities.

Hence, the memo will inform Ms Loki about business performance findings especially on the cash position of the business such as the inflow and outflow of cash from the firm.

Read more about statement of cash flow

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8 0

2 years ago

The Allowance for Bad Debts account has a credit balance of $ 5 comma 000$5,000 before the adjusting entry for bad debts expense

GaryK [48]

Answer:

62,200 allowance ending

Explanation:

allownce 5,000 credit

Because the bad debt is calculate over the sales, the bad debt expense is the result of that estimated, without considering the beginning balance of the allowance.

22% of net credit sales will be uncollectible:

260,000 x 22% = 57,200

Now ending balance will be beginning + uncollectible for the period

5,000 beginning

57,200 uncollectible for the period

62,200 allowance ending

4 0

3 years ago

Read 2 more answers

JG Asset Services is recommending that you invest $1,500 in a 5-year certificate of deposit (CD) that pays 3.5% interest, compou

skelet666 [1.2K]

Answer:

So after 5 year total amount will be $1781.529

So option (a) is correct option

Explanation:

We have given that JG Asset is recommending that you invest $1500 for 5 years at rate of 3.5%

So principle amount P = $1500

Rate of interest r = 3.5 %

Time n = 5 years

We know that when total amount is given by

$A=P(1+\frac{5.5}{100})^n$ , here r is rate of interest and n is time period

So amount after 5 years will be

$A=1500(1+\frac{3.5}{100})^5=$1781.52$

So after 5 year total amount will be $1781.529

So option (a) is correct option

5 0

3 years ago

Blake Company purchased two identical inventory items. The item purchased first cost $18.00, and the item purchased second cost

murzikaleks [220]

Answer:

c. Ending inventory will be lower if Blake uses weighted average than if FIFO were used

Explanation:

To check which answer is correct, we simply evaluate each option step by step.

Option A

Gross margin is the difference between selling price and cost.

Under FIFO gross margin is $14. (32 -18 =14)

Under LIFO gross margin is $13. (32-19 = 13)

Thus statement is incorrect as gross margin is higher if FIFO is used.

Option B

If FIFO is used, the dollar amount of ending inventory will be $19 as ending inventory will contain product purchased later that is at $19. In contrast, if LIFO is used, the dollar amount of ending inventory will be $18. Thus the statement becomes incorrect that it will be the same.

Option C

The ending inventory under FIFO is $19.

The ending inventory under LIFO is $18

The endng inventory under AVCO or weighted average will be, 18+19 / 2 = 18.5

Thus the statement is correct as the ending inventory under weighted average $18.5 is lower than ending inventory under FIFO $19. So, C is the correct Answer.

3 0

4 years ago