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solniwko [45]
2 years ago
14

Based on the information below, what is the firm's optimal capital structure? a. Debt = 40%; Equity = 60%; EPS = $2.95; Stock pr

ice = $26.50. b. Debt = 50%; Equity = 50%; EPS = $3.05; Stock price = $28.90. c. Debt = 60%; Equity = 40%; EPS = $3.18; Stock price = $31.20. d. Debt = 80%; Equity = 20%; EPS = $3.42; Stock price = $30.40. e. Debt = 70%; Equity = 30%; EPS = $3.31; Stock price = $30.00
Business
1 answer:
Ronch [10]2 years ago
7 0

Answer:

The optimal capital structure is 60% debt and 40% equity.

The correct answer is C

Explanation:

Optimal capital structure is a debt-equity mix that maximizes the stock price. Option C is a debt-equity mix that maximizes the stock price of the company.

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After solving the profit equation to isolate price, you have:
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= Total revenue − Total cost; or = (Unit price × Quantity sold) − (Fixed cost + Variable cost).
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3 years ago
At the end of the year, Dahir Incorporated’s balance of Allowance for Uncollectible Accounts is $2,400 (credit) before adjustmen
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Answer:

The adjustment Dahir would record for Allowance for Uncollectible Accounts:

Debit Bad debts expense $9,600

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Explanation:

At the end of the year, before adjustment, Dahir Incorporated’s balance of Allowance for Uncollectible Accounts is $2,400 (credit).

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Bad debts expense = $12,000 - $2,400 = $9,600

The adjustment to record Allowance for Uncollectible Accounts:

Debit Bad debts expense $9,600

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3 years ago
During its first year of operations, a company entered into the following transactions: Borrowed $5,000 from the bank by signing
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Answer:

The amount of total assets at the end of the year is $15,600

Explanation:

The computation of the total assets is shown below:

= Borrowed amount + issued stock to owners + purchase of supplies - paid to supplies

= $5,000 + $10,000 + $1,000 - $400

= $15,600

We considered all the items which are given in the question. The payment made to supplies should be deducted as it reduced the balance of cash So, the remaining items would be added

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I’m tired of being broke! Help
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Answer:

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Read 2 more answers
Kenseth Corp. has the following beginning-of-the-year present values for its projected benefit obligation and market-related val
levacccp [35]

Answer:

10%Corridor

2011 $0

2012 $250,000

2013 $295,000

2014 $360,000

Accumulated

2011 $0

2012 $280,000

2013 $367,000

2014 $372,000

Minimum Amortization of Loss

2011 $0

2012 $3,000

2013 $6,000

2014 $1,000

Explanation:

Calculation to determine the net gain or loss amortized and charged to pension expense under the corridor approach

Year, Projected Benefit Obligation (a) , Plan Assets, 10%Corridor, Accumulated d OCI (G/L) (a), Minimum Amortization of Loss

2011 $2,000,000 $1,900,000 $200,000 $ 0 $0

2012 $2,400,000 $2,500,000 $250,000 $280,000 $3,000(b)

2013 $2,950,000 $2,600,000 $295,000 $367,000(c) $6,000(d)

2014 $3,600,000 $3,000,000 $360,000 372,000(e) $1,000(f)

Calculation for 10%Corridor

2011 $0

2012 10%*$2,500,000 =$250,000

2013 10%*$2,950,000 =$295,000

2014 10%*$3,600,000 =$360,000

Calculation for Accumulated Depreciation and Minimum Amortization of Loss

a. As at the beginning of the year

b. ($280,000 – $250,000) ÷ 10 years = $3,000

c. $280,000 – $3,000 + $90,000 = $367,000

d. ($367,000 – $295,000) ÷ 12 years = $6,000

e. $367,000 – $6,000 + $11,000 = $372,000

f ($372,000 – $360,000) ÷ 12 years = $1,000

Therefore the net gain or loss amortized and charged to pension expense under the corridor approach are :

10%Corridor

2011 $0

2012 $250,000

2013 $295,000

2014 $360,000

Accumulated Depreciation

2011 $0

2012 $280,000

2013 $367,000

2014 $372,000

Minimum Amortization of Loss

2011 $0

2012 $3,000

2013 $6,000

2014 $1,000

6 0
2 years ago
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