Explanation:
The computations are shown below:
a. The market value of equity is
= $50.96 per share × 1,400,000 shares
= $71,344,000
b. The market value of debt is
= $105% × $21,100,000
= $22,155,000
c. Now the weights are as follows
Weight of equity is
= $71, 344,000 ÷ ($71,344,000 + $22,155,000 )
= 0.7630
And,
Weight of debt = 1 - 0.7630
= 0.237
Answer:
Explanation:
Net income $300,000
Adjustments for noncash effects:
Depreciation expense 15,000
Increase in inventory (2,000)
Decrease in interest payable (1,600)
Increase in accounts receivable ( 1,400)
Decrease in bond premium (3,000)
Increase in accounts payable 7,000
Net cash flows from operating activities
$314,000
Answer:
9.4%
Explanation:
Kps = Dps/Pps x Dps = $100 x 8% = $8, Kps = 8/85 = 9.4%
Answer: True
Explanation:
The following given statement is true. Porter's Five Forces model is referred to as or known as the framework for evaluating or analyzing an organization's competitive environment. The power and number of an organization's competitive rivals, suppliers, new market entrants, customers, and the substitute products, commodity influence an organization's profitability.
Answer: $972,900
Explanation:
The cost of land consists of the actual purchase price, and all other expenses that are necessary to make the asset ready for its intended use. In terms of land, all these expenditures can include title fees, unpaid taxes from previous years only (i.e. not current taxes), and other expenses need to physically prepare the land for use. The current taxes figure of $4,600 is not included here, as it is only owed during the current year, therefore normal accounting rules for taxes will apply. This figure will thus be treated as a liability until it is paid. The back taxes were aqcuired when the asset was aqcuired, and thus form part of the cost.
Old buildings that were on the land, may need to be teared down so that land can be utilised. The costs used to demolish the building also forms part of the purchase price. On top of that, to fully prepare the land for use the land may need to be landscaped and leveled. All these costs contribute towards getting the land ready for use, and are thus included in the cost. Sales made on any item related to the land, during the process when the land was still being processed for its intended use, will reduce the cost of the asset, and deduct this figure. This figure will fall under sales, which is an income to the business. The full calculation of the cost is as follows:
Purchase price: $910,000
Title insurance: + $2,400
Unpaid property taxes: + $8,300
Cost of removing building: + $45,900
Sale of salvaged materials: - $4,000
Level the land: + $10,300
Cost of land: = $972,900
