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3 years ago

You are given the following information concerning Parrothead Enterprises:

Business

1 answer:

Alenkinab [10]3 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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Lusk Corporation produces and sells 15,500 units of Product X each month. The selling price of Product X is $25 per unit, and va

Oxana [17]

Answer:

($62,000)

Explanation:

Calculation for the monthly financial advantage (disadvantage) for the company of eliminating this product

Keep Product X Drop Product X Difference

Sales $387,500 $0 $(387,500)

($25 per unit *15,500=$387,500)

Variable expenses $294,500 $0 $294,500

($19 per unit*15,500=$294,500)

Contribution margin $93,000 $0 $(93,000)

Fixed expenses $105,000 $74,000 $31,000

Net operating income (loss)$(12,000)$(74,000)$(62,000)

Therefore the monthly financial advantage (disadvantage) for the company of eliminating this product will be decrease in Net operating amount of ($62,000).

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3 years ago

An accountant who blows the whistle on financial wrongdoing by his/her employer by going outside the entity violates:

stepladder [879]

Answer:

1. The correct answer is b) Confidentiality.

2. The CEO supports the CFO and does not agree to correct the financial statements

Explanation:

1. Confidentiality is an important element for different companies and professions, for example, through confidentiality, companies protect much of their information. That is why many companies make a confidentiality agreement with their employees when hiring them with the aim that the Company information is not shared for any reason.

There are confidentiality agreements that remain in force after people have stopped working at the company, for example in the case of the accountant who denounces the financial irregularities of his former boss, violates the confidentiality agreement and if his employer shows that he has no irregularity he can sue the accountant for not complying with the agreement.

2. Executive Director of the company is known as the CEO, whose function is the development of the business plan and the organization of the company.

The CFO is the acronym for the financial director in companies, they have the function of financial planning.

In companies, Executive Director (CEO) has the authority to accept or deny actions to be taken, for example, he has the authority to tell the chief financial officer (CFO) not to correct the company's financial statements. When the company has problems, it may be that the CEO and CFO will have responsibilities taking into account their functions.

<em>I hope this information can help you.</em>

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3 years ago

Webee Ltd. has entered the growth stage of its business. It is raising external finances to sustain its operations. In which typ

Zepler [3.9K]

Flotation costs are the amounts that are significantly required for the issuing of various securities in a company such as legal fees and registration fees. In addition, the type of funding that would mostly likely incur flotation costs in Webee Ltd. would be by issuing common stocks.

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3 years ago

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A model of sea ice coverage is made with sketches and diagrams. it shows that ice cover increased in the antarctic and decreased

yaroslaw [1]

This would be a conceptual model.

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3 years ago

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Copper Corporation, a calendar year C corporation, owns stock in Bronze Corporation and has net operating income of $900,000 for

Olegator [25]

Answer:

$150,000

Explanation:

Copper Corporation

The amount of dividends received deduction will tend to depends upon the ownership percentage by the corporate shareholder.

Therefore in a situation where Copper Corporation is said to owns only 85% of what Bronze Corporation had, Copper Corporation definitely qualify for a percentage of 100 deduction or a total amount of $150,000.if we have to based on the above information given because Bronze Corporation pays Copper Corporation a dividend of $150,000.

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3 years ago