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3 years ago

The firm's target capital structure should do which of the following?

Business

1 answer:

inysia [295]3 years ago

8 0

Answer:

e. Minimize the weighted average cost of capital (WACC)

Explanation:

A: Earnings per share is linked to the stockholders' only, therefore, it cannot achieve the target capital structure. It is a wrong statement.

B: Minimizing the cost of equity is related to the equity only, so, it is also a false statement.

C: Cost of debt is only related to liabilities. It cannot minimize the total target capital structure. Therefore, it cannot be an answer.

D: It is out of question because target capital structure cannot obtain the bond rating.

E: Since weighted average cost of capital is the combination of debt and equity capital's cost, it can be minimized with the firm's target capital structure.

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Alex Company rents space to a tenant for $2,200, per month. The tenant currently owes two months rent, November and December. Th

kaheart [24]

Answer:

The correct answer is D

Explanation:

The journal entry which is to be posted on December 31, is as:

Rent receivable A/c............................Dr $4,400

Rent Earned A/c...............................Cr $4,400

As the two months rent is not paid so the adjusting entry which is to be posted is that the rent receivable account is debited whereas the rent earned account is credited with the amount of two months rent. (which is $2,200 + $2,200 = $4,400).

5 0

3 years ago

Before the year began, Mitchell Manufacturing estimated that manufacturing overhead for the year would be $175,500 and that 13,0

masya89 [10]

Answer:

B, 195750

Explanation:

Let's first figure out the manufacturing overhead per direct labor hour

175500/13000= 13.5

So we allocate 13.5 in manufacturing overhead per direct labor hour

Let's the mulitply this by the number of actual direct labor hours

14500*13.5=195750

6 0

3 years ago

Business head Brent wants to categorize items under the Challenge, Risk, and Reward headings for his IS implementation presentat

Savatey [412]

Answer:

Challenge

Quality Issues
Lack of Documentation

Risk

Loss of Confidentiality
System Unavailability

Reward

Increased Quality
Reduced Cycle

Explanation:

A challenge is something that test you and your business. The are temporary obstacles that you have to surpass in order to be successful.

Business Risk means the possibility of loss or any adverse condition that may severely damage the organization's ability to achieve its goals and objectives.

Reward means a positive outcome that has happened because of productive decision making and effective management.

7 0

2 years ago

Suppose business decision makers become more optimistic about the future and, as a result, increase their investment spending by

Art [367]

Answer:

$80 million

Explanation:

We know that

Multiplier = (1) ÷ (1 - marginal propensity to consume)

= (1) ÷ (1 - 0.75)

= (1) ÷ (0.25)

= 4

Now the GDP would increase by

= Increase in Investment spending × multiplier effect

= $20 billion × 4

= $80 million increase

We simply multiplied the investment spending increase with the multiplier effect

4 0

2 years ago

Assume the initial present value of the payments on a lease are equal to the cost of the leased asset. This capital lease is rec

Whitepunk [10]

Answer: D) present value of the remaining lease payments.

Explanation:

When recording a capital lease in the balance sheet of the lessee, the amount recorded is the lower amount between the present value of the remaining lease payments or the cost of the leased asset.

As the cost of the leased asset is equal to the initial present value of the payments, the cost will therefore be higher than the current present value of the remaining payments so the appropriate amount to put in the balance sheet will be the current present value of the remaining lease payments.

4 0

3 years ago