Cost of Equity as per CAPM = rf +beta*(rm-rf)
rf = risk free rate = 2.5%
beta =1.12
rm-rf = market risk premium = 6.8%
Cost of equity = 2.5+ 1.12*6.8 = 10.116% = 10.12%
Answer:
a. subtract the company's expenses from its revenue.
Explanation:
For computing the profit or loss we simply deduct all the expenses incurred from the revenue earned.
If the revenue is more than the expenses than it would profit to the company
And, if the revenue is less than the expenses than it would be loss suffered by the company
In mathematically,
Net income = Total revenues earned - all expenses incurred
And, the net loss = All expenses incurred - total revenues earned
Hence, the first option is correct
Answer: option C.
It corrects the error in the original because when business seek to reduce cost cut positions not the contrary. The employment goes down which is the same that unemployment goes up.
Answer:
B) did not change.
Explanation:
Stock dividend is the payment of dividend to stockholder in the form of stock/shares of the company. Stock are issued at the market price and the value of the dividend is transferred from the retained earning to the add-in-capital accounts.
Dividend Value = 200,000 x 10% x 25 = $500,000
Par Value of Stocks = $1 x 20,000 = $20,000
Add-in-capital excess of par common stock = ($25-$1) x 20,000 = $480,000
Following entry will be recorded
Dr. Retained earning $500,000
Cr. Common Stock $20,000
Cr. Add-in-capital excess of par common stock $480,000
As all of the accounts are equity accounts and decrease in one equity account and increase in another equity account will not change the total stockholders equity value.
