Answer:
Option B The Glass-Steagall Act
Explanation:
According to the Glass-Steagall Act, the commercial banking was separated from the investment banking. This was made to provide the investor investment security by creation of the Federal Deposit Insurance Corporation.
So here Elyon will be entertained with the imbursement of the amount at the deposit value which the insurance will safeguard the depositor's value due to bank failure.
Answer:
(A) Cost of equity= 15.74%
(B) WACC = 12.86%
Explanation:
Palencia paint corporation has a 35% debt from it's target capital structure and 65% common equity
The before-tax cost debt is 10%
Marginal tax rate is 25%
Po is $22.00
Do is $2.25
Constant rate(g) is 5%
(A) The cost of common equity can be calculated as follows
= [Do(1+g)/Po] + g
=[2.25(1+0.05)/22] + 5%
= [2.25(1.05)/22] + 5%
= 2.3625/22 + 5%
= 0.1074+5%
= 0.1074×100+5%
= 10.74%+5%
Cost of equity = 15.74%
(B) The WACC can be calculated as follows
= weight of debt×after-tax cost of debt + weight of equity×cost of equity
= (35%)(10%)(1-25%) + (65%)(15.74%)
= (35%)(10%)(1-0.25) + (65%)(15.74%)
=(35%)(10%)(0.75) + (65%)(15.74%)
= 2.63% + 10.23%
= 12.86%
Hence the cost of equity is 15.74% and the WACC is 12.86%
Answer:
The answer is continuous budgeting.
Explanation:
This(continuous budgeting) is a method of preparing budgets for future periods(example periods can be monthly, quarterly etc.) revisiting them during current periods, and making adjustments at the end of the period. It is also known as rolling budget.
The advantages are:
1. It helps in reducing the uncertainty of budgeting.
2. It helps the management to know where the company is moving in terms of sales and profitability.
Disadvantage:
1. It is time consuming.
Answer:
$38,340
Explanation:
The computation of the amount of overhead cost allocated to the production activity is shown below:
= Equipment expense × activity cost pools + Indirect labor × activity cost pools
= $62,000 × 0.60 + $11,400 × 0.10
= $37,200 + $1,140
= $38,340
We simply added the equipment expense and the indirect labor after considering the activity cost pools of both overhead cost
Answer:
I would choose weighted average because it's more better than FIFO when prices are rising.
Explanation:
