Answer:
The journal entry to record the issuance of new stocks is:
Dr Cash 164,800
Cr Common stock 72,100
Cr Additional paid in capital in excess of par value 92,700
When you issue new stocks, the common stock account increases by par value (= 10,300 stocks x $7). Any money obtained over par value must be recorded under the additional paid in capital account (= 10,300 x $9).
Answer:
After tax cost of debt is 4.16%
Explanation:
The yield on the debt which is pre-tax cost of debt can be computed using the rate formula in excel, which is given as follows:
=rate(nper,pmt,-pv,fv)
where nper is the number of coupon payments,this is calculated as 19*2 since it has a semi-annual coupon interest
pmt is the periodic coupon payment 6.1%/2*$2000=$61
pv is the current price of the bond which is $1933
fv is the face value repayable on redemption $2000
=rate(38,61,-1933,2000)
=3.20%
This is semi-annual yield , annual yield is 3.20%*2=6.40%
After tax cost of debt=6.40%*(1-t)
where t is the tax rate at 35%=0.35
after tax cost of debt=6.40%*(1-0.35)
=4.16%
Answer: b. The beta of the portfolio is higher than the highest of the three betas
Explanation:
The beta of a portfolio is calculated as a weighted average of the individual betas of the individual stocks. As such, the highest individual beta will be the upper limit of the portfolios entire beta.
For instance.
3 stocks A, B and C have betas of 1, 1.3 and 2 respectively.
A has a weight of 1%, B has a weight of 1% and C has a weight of 98%.
The portfolio beta will be;
= (0.01 * 1 ) + ( 0.01 * 1.3) + ( 0.98 * 2)
= 1.98
Even if the stock with the highest beta had an advantage of weighing such a high figure, it it mathematically impossible for the portfolio beta to be higher than it.
Revocation of an offer is valid once it is <u>B. received</u> by the offeror (the person making the offer), meaning that it has been communicated to the other party by the offeree.
<h3>What is the revocation of an offer?</h3>
The revocation of an offer is the nullification or canceling of an offer by the offeree. It becomes effective when the offeree communicates to the offeror before acceptance.
Once the revocation has been communicated, the offer is no longer considered valid and cannot legally be accepted. The implication is that revocation goes into effect immediately it has been communicated to the relevant party.
Thus, revocation of an offer is valid once it is <u>B. received</u> by the offeror.
Learn more about offer revocations at brainly.com/question/26532053
Answer:
Proposal A: $185,714.29
Proposal B: $160,000
Explanation:
Giving the following information:
$10,000 for installations to be completed.
The revenue generated by each unit is $ 20.00
Proposal A:
Fixed costs= 55,000
The variable cost is $13.00
Proposal B:
Fixed costs= 70,000
The variable cost is $10.00
Break-even point (dollars)= fixed costs/ contribution margin ratio
Proposal A: (55,000+10,000)/[(20-13)/20]= $185,714.29
Proposal B: (70,000 + 10,000)/[(20-10)/20]= $160,000
