Answer:
total value be in the stock $9,000
Explanation:
given data
currently priced = $90 per share
Number of Stocks = 100 share
solution
we get here first Value of Position that is express as
Value of Position = $90 × 100
Value of Position = $9,000
and
After stock split
Number of Stocks will be
Number of Stock = 100 × 3 = 300
and
Price per Share will be
Price per Share = 
Price per Share = $30
so
Value of Position = 30 × 300
Value of Position = $9,000
Answer:
Cost of Equity = 11.30%
Explanation:
Computation Cost for Equity
Using Gordon Model
Market Price = [Dividend × (1 + Growth Rate )] / (Cost of Equity - Growth Rate)
41.08 = [$3.01 × (1 + 0.037)] / (Cost of Equity - 0.037)
41.08 = [$3.01 × (1.037)] / (Cost of Equity - 0.037)
Cost of Equity - 0.037 = $3.12 / 41.08
Cost of Equity - 0.037 = $0.076
Cost of Equity = 0.076 + 0.037
Cost of Equity = 0.1130
Cost of Equity = 11.30%
Answer:
d. If the WACC is 9%, Project B's NPV will be higher than Project A's.
Explanation:
The internal rate of return is the return in which the NPV is zero i.e cash inflows equal to the initial investment
While the WACC refers to the cost of capital by considering the capital structure i.e cost of equity, cost of preferred stock and cost of debt by taking their weightage
Now if the WACC is 9% so project B NPV would be higher as compared to project A as we can see that project B IRR is greater than the project A IRR
Therefore option d is correct
Answer:
The answer is: B) An inflow of $12,000
Explanation:
Croft Company's cash flow should include the total cash inflow (the company received money) of $12,000. Even if the company bought the land the day before, paying the $10,000 yesterday, the cash flows are independent one from another. It should have recorded the outflow of $10,000 "yesterday".
Answer: Will report a liability of $5000 for judgement debt and a claim of $11,000
Explanation:
The liability refers to the obligations of the firm which are certain is going to make payment as compensation.
The $5000 liability, although payment has not been made it's already Incurred by the company under the acural concept.
The claim of $11,000 is only probable and not certain even though amount and time of execution can be estimated, since it's not certain it will only be recorded as a claim in the goverments fund balance sheet.
