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4 years ago

You are given the following information concerning Parrothead Enterprises:

Business

1 answer:

Alenkinab [10]4 years ago

3 0

Answer:

7.85%

Explanation:

Face value of bond =$2000

Price of current bond= face value× 106.5% = $2130

Term= 25 years×2= 50 period

Coupon rate= 7%×1/2= 3.5%

Coupon amount= coupon rate×face value = $2000×3.5/100

=$70 for a period

YTM of bond= [coupon amount+ (maturity value-current price)/Term]/0.6×current price+0.4×maturity value]

YTM of bond= 6.487% per annum

Total market value of bond= 8,400bonds× $2130= $17,892,000

Market value of common stock= 275,000shares × 62.50= $18012500

Weight of common stock= 0.490009385

Weight of preferred stock= 0.023259294

WACC= Wd* Kd + Wc*Kc + Wp*Kp

= 0.486731321× 4.86525% +

0.490009385× 10.9624275+

0.023259294× 4.7368421%

=7.849%

= 7.85%(rounded)

Thus, WACC is 7.85%

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Which scenario best reflects the relationship between production and demand in a recession?

Zarrin [17]

Answer:

C. Car dealerships cannot sell their stock

There are four scenarios as following:

a.) Car dealerships have minimal overstock.

b.) Car dealerships are not restocking.

c.) Car dealerships cannot sell their stock.

d.) Car dealerships cannot obtain stock.

=> The answer is C

Explanation:

Recession is the term used to describe the situation when a country suffer from the negative economic growth (indicated in the negative GDP growth rate).

The recession is considered the result of the economic downfall of that country, resulting in the decrease in capital inflow, slowing down the production and increasing the unemployment rate in that country. Consequently, the wage of people there would decrease, lowing their consumption. So that with lower demand and level of expense of the market, the <u><em>car dealerships cannot sell their stock. </em></u>

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3 years ago

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What is the net effect on a firm's working capital if a new project requires: $41,375 increase in inventory, $35,370 increase in

Kaylis [27]

Answer: $32,729

Explanation:

Net working capital for a period is the current assets of the company less the current liabilities.

Change in Net Working capital is:

= Increase in inventory + Increase in accounts receivable - Increase in Accounts payable

= 41,375 + 35,370 - 44,016

= $32,729

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3 years ago

Floods, product failure, change in demand, and ineffective sales are all examples of _____. costs rewards risks revenue

ValentinkaMS [17]

Floods, product failure, change in demand and cost ineffective sales are all examples of a risk. These examples are a possibility for a company loss that will impact the company profit. Therefore, risk analysis is needed that will outline what you are prepared and how you are going to respond to risk.

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4 years ago

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Raymond is completing a study on discrimination in which he has noted that saleswomen who wear skirt suits make more sales than

Anit [1.1K]

Answer:

contingency

Explanation:

Based on the information provided within the question it seems that Raymond is using contingency variables to more accurately explain his results. These are variables that depend on a certain factor which can affect the results of an experiment either in a positive or negative fashion. Which in this scenario this would be whether or not the purchasing decision maker is male (masculine) or not.

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3 years ago

merchandise is sold for cash. the selling price of the merchandise is $2,600, and the sale is subject to a 6% state sales tax. t

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The journal entry for the sale would include a credit to sales tax payable for $156 if the selling price of the merchandise is $2600.

The government levies a consumption tax known as a sales tax on the purchase of goods and services. At the point of sale, a standard sales tax is imposed, collected by the retailer, and paid to the government. Companies must first apply for a sales tax permit from their state's department of taxation in order to be able to collect sales tax from customers. Every time a customer makes a purchase, businesses collect sales tax, which they subsequently monthly or quarterly send to the state.

As the selling price of the merchandise is $2,600 and the state sales tax is 6%, this means that 6% of $2,600 has to be paid to the state governing body.

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To know more about sales tax refer:

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