Answer:
$97 million cash inflow from financing activities.
Explanation:
Given: Company issue bonds for $100 million
Repay long term notes payable is $10 million.
Company sell its own shares= $12 million
Pay cash dividend= $5 million.
Now, lets calculate the cash inflow from financing activities (CFF)
∴ Formula; Cash inflow from financing activities= 
Cash inflow are the item through which cash is flowing in the company.
∴ cash inflow= 
Cash inflow= 
Cash inflow from financing activities= 
Cash inflow from financing activities is $97 million
Answer:
Option D (The optimal........capital) would be the right choice.
Explanation:
- The optimal composition of capital would be the one with the lowest average capital structure.
- Such alternatives are meaningless since the optimal capital structure is not reflected by them. Maximizing earnings growth, interest burdens, or equity burdens would not enhance the worth including its shareholder.
Answer:
$10,000
Explanation:
Data provided in the question:
Dividend per share = $0.90
Number of shares = 40,000
Number of years for which dividend is not paid = 4 years
Dividend paid this year = $170,000
Now,
Dividend still in arrears
= ( Number of years × Shares × Dividend per share ) - Dividend paid this year
= [ ( 4 + 1 ) × 40,000 × $0.9 ] - [ $170,000 ]
= $180,000 - $170,000
= $10,000
Answer:
1) 6% , 2) 5% , 3) As inflation rate ise higher than expected inflation rate, real interest rate would be lower than expected real interest rate
Explanation:
Real Interest Rate is the interest rate, which accounts for the impact of inflation.
Real Interest Rate = Nominal Interest Rate - Inflation
1) 14% - 8% = 6%
2) 14% - 9% = 5%
3) In case of variation in expected & actual inflation rate
1 + nominal interest rate = (1 + real interest rate) (1 + expected inflation rate)
1 + 14% = (1 + r) (1 + 3%)
1.14 = (1 + r) (1.03)
1.14 = 1.03 + 1.03r
0.11 = 1.03r
r = 8.82 {If inflation is higher at 9%}
If inflation could have been at expected 3%, real interest rate could have been 14% - 3% = 11%.
So : As inflation rate turned out to be higher than expected inflation rate, real interest rate turned out to be lower than expected real interest rate
Answer:
bad debt expense for the year 2016: 11
Explanation:
We can solve for bad debt expense doing the following
beginning allowance
- write-off accounts
+ bad debt expense
Equals to ending allowance
<u>We plug our values: </u>
2016 Beginning allowance 32
(Ending 2015)
write-off (12)
bad debt expense <u> ? </u>
2016 Ending allowance 31
And solve for bad debt expense:
Bad debt expense = 12 + 31 - 32 = 11
