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3 years ago

Companies raise capital in two main forms:

Business

1 answer:

Anika [276]3 years ago

6 0

Answer: The answer is a

Explanation:

Equity : This is the ownership claim to the resources of the firm. In equity financing funds are raised either by initial capital contribution by owners or by additional capital contribution by existing and new owners for example the sale of shares to shareholders or by reinvesting profit earned by the business. Where an existing business is being financed by equity involving funds from new investors, it means that the original owners of the business will have to share the ownership, risk and profit of the firm with the new investors.

Debt financing : This is when a company raise a capital for the day to day running of the company known as a working capital through the selling of bond to individuals or institutional investors, in which those individuals or the institutional investors will now become a creditors to the company. As a result of been the creditor to the company they will be paid interest on the amount of money they lend to such company. However, In selecting the sources of funds by a company, the following must be taken into consideration

Cost of obtaining the fund : The cost of obtaining the fund from the various sources must be weighed against the rate of return of the fund.

The burden and timing of principal and interest payment : The company must consider the timing of principal and interest payment. A company must not borrow what they cannot pay,the method of repayment may considerably affect the ability of the firm to repay the loan without difficulty.

Risk involved : This refers to the possibility that the contributor of the fund may someday seek to withdraw his investment or attract higher interest rate.

Maturity of the debt : The duration or the specific use of the money will determine the best sources for the money. They company must consider maturity dates of the loan because they must plan in advance to have sufficient cash on hand when the

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Edwards Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are expected to total

lisov135 [29]

Answer:

Predetermined overhead rate = $9

January = $12,000 over applied

December - $2,000 under applied

Explanation:

For computing the ended overhead amount, first, we have to compute the predetermined overhead rate. The formula is shown below:

Predetermined overhead rate = (Total estimated manufacturing overhead) ÷ (estimated machine labor-hours)

= $1,800,000 ÷ 200,000 hours

= $9

Now we have to find the actual overhead for the January month which equal to

= Actual machine labor-hours × predetermined overhead rate

= 22,00 hours × $9

= $198,000

So, the ending overhead equals to

= Actual manufacturing overhead - actual overhead

= $186,000 - $198,000

= $12,000 over applied

And, the actual manufacturing overhead for the December month which equal to

= $186,000 + $1,940,000

= $2,126,000

Actual overhead = (22,000 + 214,000) × 9 = $2,124,000

So, the ending overhead equals to

= Actual manufacturing overhead - actual overhead

= $2,126,000 - $2,124,000

= $2,000 under applied

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3 years ago

Table 1 contains information about a small business for one month. The business

8090 [49]

Answer:

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2 years ago

Read 2 more answers

Your younger sister needs $50 to buy a new bike. she has opened a lemonade stand to make the money she needs. your mother is pay

Elis [28]

Elastic demand means that consumers are sensitive to price and that increased prices can lead to lower sales. There isn't enough information to fully answer this question. We don't know how elastic the demand is. If the demand is only slightly elastic, the increased price and lower demand could still equal higher profits.

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3 years ago

While sitting beside a swimming pool, your neighbor Bob, a roof installer, tells you that you should buy stock in HotNet because

Nesterboy [21]

Answer: d) Cannot sue Bob for misrepresentation

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3 years ago

A ________ transaction in the interbank market is the simultaneous purchase and sale of a given amount of foreign exchange for t

miskamm [114]

Answer:

Explanation:

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3 years ago