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kow [346]
3 years ago
7

1. The firm's target capital structure should be consistent with which of the following statements? Maximize the earnings per sh

are (EPS). Minimize the cost of debt (rd). Obtain the highest possible bond rating. Minimize the cost of equity (rs). Minimize the weighted average cost of capital (WACC).
Business
1 answer:
inessss [21]3 years ago
6 0

Answer:

Minimize the weighted average cost of capital (WACC).

Explanation:

The weighted average cost of capital (WACC) is the interest rate at which a company leverages its activities. The WACC includes the cost of debt (i.e. bonds and loans) and equity (i.e. common stock and retained earnings). It is calculated by multiplying each capital source by its interest rate and then adding the results.

A company should try to have the lowest WACC possible, since a lower interest rate equals higher profits.

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Amazon.com and barnes and noble are in the same industry, but their primary difference can be defined as two companies that have
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3 years ago
(Evaluating profitability​) Last​ year, Stevens Inc. had sales of ​$397,000​, with a cost of goods sold of ​$115,000. The​ firm'
amm1812

Answer:

(A) Income statemnt for year ended 2XX9

sales                          397,000

COGS                        (115,000)

gross profit                282,000

operating expenses (125,000)

income before taxes 157,000

income tax expense (53,380)  <em>34% of 157,000</em>

Net Income               103,620

(B) Profit Margin 26.10%

(C) non-sufficent information

Explanation:

(A)

the dividends and retained earnings are not part of the income statment.

(B)

profit margin:

net income / sales = 103,620/397,000 = 0.261007556 = 26.10%

(C) non-sufficent information

8 0
3 years ago
The records relating to the defined benefit pension plan of Broad Company include a $44 million service cost, a $50 million inte
NeX [460]

Answer:

The amount of pension expense reported by the company is $68 Million

Explanation:

the particulars of pension expense that will recognized and reported by the company.

Service Cost                                                       $44 Million

Add: Interest Cost                                              <u>$50 Million</u>

Total Cost                                                           $94 Million

Less: Expected Return on Plant Asset           <u>  $31 Million</u>

                                                                           $63 Million

Add: Amortization of a prior service cost        <u>$05 Million</u>

Pension expense reported by the company  $68 Million

Thus, the Pension expense reported by the company is $68 Million

4 0
3 years ago
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