Answer:
The forecast inflation rate is implied by these interest rates is 1.13%
Explanation:
when dealing with inflation, we have that:
(1 + nominal interest rate) = (1 + real interest rate) * (1 + inflation rate)
1.0144 = 1.0031 * ( 1 + inflation rate)
inflation rate = 1.0144/1.0031 - 1
= 1.13%
Therefore, The forecast inflation rate is implied by these interest rates is 1.13%
Answer:
$2,000
Explanation:
Ms. Pear invested $12,000 in 1,000 shares of YZ Corporation. After the dividends she received and the stock split, she ended with 2,400 shares. Since she sold 400 shares, it represents 16.67% of her total shares (= 400 / 2,400). To determine the basis for the 400 shares she sold all we need to do is multiply 16.67% x $12,000 (initial investment) = $2,000
Answer:
$751,562.50 and $837,203.125
Explanation:
The formula to compute the value of the firm under the MM proposition approach is shown below:
In first case
= {EBIT × ( 1 - tax rate)} ÷ WACC
= {$185,000 × ( 1 - 0.35)} ÷ 16%
= $120,250 ÷ 16%
= $751,562.50
Since no debt is there which means the firm is unlevered firm and computation is done accordingly.
All other information which is given is not relevant. Hence, ignored it
In second case
= {EBT× ( 1 - tax rate)} ÷ WACC
= {$172,850 × ( 1 - 0.35)} ÷ 16%
= $112,352.50 ÷ 16%
= $702,203.125
EBT = $185,000 - $135,000 × 9%
= $185,000 - $12,150
= $172,850
So, the value of firm would be
= $702,203.125 + $135,000
= $837,203.125
Answer:
All of the choices are correct.
Explanation:
GAAP is an acronym for Generally Accepted Accounting Principles, it comprises of the accounting standard, procedures and principles used by public institutions in the United States of America. The U.S GAAP is issued by the Financial Accounting Standards Board (FASB) and adopted by the U.S. Securities and Exchange Commission (SEC).
GAAP includes each of the following pronouncements:
Statements of Financial Accounting Standards, Accounting Research Bulletins, Accounting Principles Board Opinions.
For external reporting purposes, United States of America, Generally Accepted Accounting Principles (GAAP) allows companies to use only the traditional format of the income statement.
United States of America, Generally Accepted Accounting Principles (GAAP) is the accounting principles, procedures and standard issued by the Financial Accounting Standards Board (FASB) and adopted by the United States of America, Securities and Exchange Commission (SEC).
When accountants prepare and compile financial statements for public firms, it must be in line with United States of America, Generally Accepted Accounting Principles (GAAP).