Answer:
Market value of a corporation is its value according to the stock market. Book value on the other hand is the difference between assets and liabilities of a corporation.
Explanation:
The market value of a corporation is the value attributed to it by the financial market. It is calculated by multiplying the price of each share by the number of outstanding shares.
The book value is the value of the corporation if the assets are liquidated and liabilities are paid off. It is calculated by finding the difference between assets and liabilities.
If the market value of a corporation is greater than its book value it means the market does not believe that the company is worth what it has mentioned in its book value.
If the market value is higher than the book value, it indicates that the market has confidence in the corporation's ability to generate earnings in the future.
Answer:
WACC = 6.66
%
Explanation:
<em>Weighted average cost of capital is the average cost of all of the long-term types of finance used by a company weighted according to the that amount of finance used in relation to the total pool of fund</em>
WACC = (Wd×Kd) + (We×Ke)
After-tax cost of debt = Before tax cost of debt× (1-tax rate)
Kd-After-tax cost of debt = 5%
Ke-Cost of equity = 11.4%
Wd-Weight f debt -74%
We-Weight of equity = 26%
WACC = (0.74× 5%) + (0.26 × 11.4%) = 6.66
%
WACC = 6.66
%
Answer:
$3,475.75
Explanation:
the journal entries required to record the purchases are:
Dr Inventory 5,500
Cr Accounts payable 5,500
Dr Inventory 360
Cr Cash 360
Dr Accounts payable 2,475
Cr Inventory 2,475
Dr Accounts payable 3,025
Cr Cash 2,934.25
Cr Purchase discounts 90.75
Cost of inventory = $5,500 + $360 - $2,475 - $90.75 = $3,475.75
Answer:
The pension expense for the year is 198,400
Explanation:
According to the reports received by the company we have the following relevant data to calculate the pension expense for the year:
Service cost of $ 193,000
Interest cost of $ 31,000
Considering that the long-term expected rate of return on plan assets is 10%, then $ 256,000×10%= 25,600
Pension expense for the year= Service cost of $ 193,000 +Interest cost of $ 31,000-25,600= 198,400.
Answer. D) The signing bonus of $26,000 payable after one year of employment.
Explanation: Because it is more advantageous on him and also he has the time to payback within a year. He will be at rest to use fund for something that can fetch more money even within the 12 months period.
