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Varvara68 [4.7K]
3 years ago
11

Bankston Corporation forecasts that if all of its existing financial policies are followed, its proposed capital budget would be

so large that it would have to issue new common stock. Since new stock has a higher cost than retained earnings, Bankston would like to avoid issuing new stock. Which of the following actions would REDUCE its need to issue new common stock?
A. Increase the proposed capital budget.
B. Reduce the amount of short-term bank debt in order to increase the current ratio.
C. Increase the dividend payout ratio for the upcoming year.
D. Reduce the percentage of debt in the target capital structure.
E. Increase the percentage of debt in the target capital structure.
Business
1 answer:
Reil [10]3 years ago
6 0

Answer:<em> Option (E) is correct.</em>

From the given option, the following will reduce Bankston's need to issue new common stock: <em>Increase the percentage of debt in the target capital structure.</em>

With an increase in percentage of debt , there will be a proportional increase in cost of equity and thereby decreasing investment in equity. This will therefore reduce Bankston's need to issue new common stock

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Which of the following statements explains the relationship between Social Security and Medicare taxes?
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The best and most correct answer among the choices provided by your question is the fourth choice or letter D.

The statement "<span>Social Security is applied to all wages up to the maximum taxable earnings. Medicare is applied to all wages without limit." best </span><span>explains the relationship between Social Security and Medicare taxes.</span>

I hope my answer has come to your help. Thank you for posting your question here in Brainly. We hope to answer more of your questions and inquiries soon. Have a nice day ahead!
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What does O + A + C = K stand for and mean in the legal "Formula" for contracts?<br> please helpppp
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O Stands for offer , A stands for acceptance , C stands for consideration , K stands for contract . An offer requirement, a contract and acceptance have it’s own thing.

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Both are ongoing

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Answer:

1. Time spent away from family is an implicit cost.

2. Transportation is an explicit cost

3. Forfeited working experience is an implicit cost

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A college is an educational institution that provides opportunities for higher learning and specialized professional training. A decision to go to college should be conscious one that takes into consideration all the important aspects. The most important consideration is the cost of education, since attending college is usually an expensive proposition. One needs to consider the different costs that they will meet, whether implicitly or explicitly. Lets us consider the following implicit and explicit costs as shown;

1. Implicit cost: an implicit cost is a cost incurred without necessarily spending money. They are more of an opportunity cost that is calculated from the alternatives undertakings that one has sacrificed. An implicit cost is not an accounting cost but an economical cost that tends to consider options that are not actual expenditures. They are; time spent from family, forfeited working experience and forgone earnings. These are actually items that one sacrifices when he/she decides to go to college. Time spent from family is an implicit cost since one will spend most of his or her time in college. Attending college also means that one wont be able to go for a job and get some working experience while earning, therefor this is also an implicit cost. Explicit cost are determined by estimating the value of the activity sacrificed.

2. Explicit costs: an explicit cost is a type of accounting cost that needs one to actually spend money. It is an out of pocket cost where one has to use money to purchase a good or service. Examples are Books and materials. College students are often required to purchase specific books and materials for study. Transportation is also a cost that requires one to spend on bus fare or even cab fare to and from college. These are costs that require one to actually use money.

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