Answer:
rE= 0.163333 or 16.3333% rounded off to 16.33%
Explanation:
The WACC or weighted average cost of capital is the cost of a firm's capital structure which can contain one or more of the following components namely debt, preferred stock and common equity. The formula to calculate WACC of a firm with only two components including debt and equity is as follows,
WACC = wD * rD * (1 - tax rate) + wE * rE
Where,
- wD and wE represents the weight of debt and common equity respectively.
- rD and rE represents the cost of debt and common equity respectively.
- We take after tax cost of debt (1 - tax rate)
To calculate the cost of equity, we can plug in the values of remaining variables as given in the question in the above formula,
0.122= 0.4 * 0.08 * (1 - 0.25) + 0.6 * rE
0.122 = 0.024 + 0.6 * rE
0.122 - 0.024 = 0.6 * rE
rE = 0.098 / 0.6
rE= 0.163333 or 16.3333% rounded off to 16.33%
Answer:
cash 515,000 debit
bonds payable 500,000 credit
Premium on Bonds 15,000 credit
Explanation:
to know the cash proceeds fro mthe issuance of the bonds we will multiply the face value by the point issued:
500,000 x 103 / 100 = 515,000
As the amount collected is higher than face value we reocgnize a Premium on Bonds Payable for the difference:
515,000 - 500,000 = 15,000
$24,800 would be the book value of the asset on January 1, 2019
Explanation:
Straight-line depreciation is a popular depreciation process in which the value of a fixed asset slowly declines over its useful life.
Straight line depreciation is the default method used to slowly reduce the amount of a fixed product over its useful life.
Divide the estimated useful life (in years) into 1 to arrive at the straight-line depreciation rate.
Multiply the depreciation rate by the asset cost (less salvage value).
For example, if a of $20,000 and a useful life of 5 years. The straight line depreciation for the machine would be calculated as follows: Cost of the asset: $100,000. Cost of the asset – Estimated salvage value: $100,000 – $20,000 = $80,000 total depreciable cost.
Yes it does. Unemployment is when a person isn't currently hired at a work pleace. If people are unemployed they are making no income so less people are in need of products so it lowers the demand.