Answer:
a. Terrell's Optimal Capital Structure is 40:60. It means to obtain optimal capital structure in-order to increase value of firm, Terrell should finance 40% of its Assets through Debt and remaining through Common Equity.
b. The optimal Capital Structure is the point where company's WACC is minimized. So, 40:60 is the ratio where Terrell's WACC will be minimized.
Explanation:
The goal of Management is to increase Shareholders' wealth and not to generate profits because wealth is something that is for long-run whereas Profits are temporary. Management would accept projects having negative NPV if its goal is to maximize Profit.
Maximizing Shareholders' wealth means to increase the Share Price whereas Generating a higher EPS is Profit Maximization Strategy. So, you should look for that Capital Structure Point where the Company's Stock Price is Highest.
Thanks!
Answer:
<em>an option agreement.
</em>
Explanation:
The <em>option agreement</em> in the arena of financial derivatives <em>is a contract between two parties that gives one party the right, but not the obligation, to buy an asset from the other party or to sell an asset to the other</em>.
It outlines the agreed-upon price and the transaction's future date.
Here short term investment is debited as it increased the asset and credited the cash as decreased the asset.
here cash is debited as it increased the asset and credited the interest revenue as it also increased the revenue.
What Are Short-Term Investments?
- Marketable securities, commonly referred to as temporary investments or short-term investments, are financial investments that can be quickly converted to cash, usually within five years.
- After only three to twelve months, many short-term investments are sold or turned into cash. CDs, money market accounts, high-yield savings accounts, government bonds, and Treasury bills are a few typical examples of short-term investments.
- Short-term investments, also known as marketable securities or temporary investments, are financial investments that can be easily converted to cash, typically within 5 years.
- Typically, these investments are high-quality and highly liquid assets or investment vehicles.
- Short-term investments may also specifically refer to financial assets of a similar kind, but with a few additional requirements, that are owned by a company.
To know more about Short-term investment visit:
Answer:
The contrast coder's weekly salary last week was $450.00.
Explanation:
The CC charged $5.00 per record coded. The previous week she coded 300 records.
Write it like:
$5.00 x 300 = 1500.00
Though remember the hospital has a 30% benefit.
So:
1500.00 x 30%*=450.00
*0.30 if you can't do the % sign on the calculator
Sorry if it doesn't work out!
Answer:
a. 3.56%
b. 2.31%
Explanation:
In this question, we use the Rate formula which is shown in the spreadsheet.
The NPER represents the time period.
Given that,
Present value = $1,040
Assuming figure - Future value or Face value = $1,000
PMT = 1,000 × 4% ÷ 2 = $20
NPER = 11 years × 2 = 22 years
The formula is shown below:
= Rate(NPER;PMT;-PV;FV;type)
The present value come in negative
So, after solving this,
1. The pretax cost of debt is = 2 × 1.78% = 3.56%
2. And, the after tax cost of debt would be
= Pretax cost of debt × ( 1 - tax rate)
= 3.56% × ( 1 - 0.35)
= 2.31%