Answer:
I think that they MIGHT be A C and D
Explanation:
Answer:
the formula used to calculate the cost of equity (required rate of return) based on the bond yield plus risk premium is fairly simple:
cost of equity (Re) = yield of debt (bonds) + firm's risk premium = 11.52% + 3.55% = 15.07%
I'm not sure if the question was copied correctly or not, so I looked for similar questions and it included different numbers.
<em>The Harrison Company is closely held and, therefore, cannot generate reliable inputs with which to use the CAPM method for estimating a company's cost of internal equity. Harrison's bonds yield 10.28%, and the firm's analysts estimate that the firm's risk premium on its stock over its bonds is 4.95%. Based on the bond-yield-plus-risk-premium approach, Harrison's cost of Internal equity is: = 10.28% + 4.95% = 15.23%</em>
<em>Another question: </em>
<em>The Kennedy Company is closely held and, therefore, cannot generate reliable inputs with which to use the CAPM method for estimating a company's cost of internal equity. Kennedy's bonds yield 11.52%, and the firm's analysts estimate that the firm's risk premium on its stock over its bonds is 4.95%. Based on the bond-yield-plus-risk-premium approach, Kennedy's cost of internal equity is: = 11.52% + 4.95% = 16.47%</em>
Answer:
$1,800
Explanation:
Here Decrease or increase can be calculated as under:
Increase in Revenue $15,000
Increase in Variable Cost (72k / 100k * $15,000) ($10,800)
Increase in Promotional Cost <u> ($6,000) </u>
Net Operating Income Decrease ($1,800)
Hence the decrease in Net Operating Income would be by $1,800.
Note: As the complete question is not provided and is not found online, almost similar question was picked from the internet. So make sure you account for of the differences.
The Numerical section of the question is given as under:
Answer:
A. Earned.
Explanation:
The accrual basis of accounting applicable to proprietary fund types requires that exchange revenues be recognized when <u>earned.</u> In Accrual Accounting, revenue is recognized when it is earned and is recognizable to be collected in future, not when cash is received against that revenue.
