Which business types are easy to form? click all that apply. select one or more:

If a firm plans to issue new stock, flotation costs (investment bankers' fees) should not be ignored. There are two approaches t

AysviL [449]

Answer:

Floating cost adjustment is 3.25%

Explanation:

Flotation-adjusted cost of equity = (Expected dividend at the end of Year 1 / Net proceeds per share) + Growth rate.

Expected dividend at the end of Year 1 (D1) = $ 2.30 (given in question)

Net proceeds per share = (21.30 - 4 % of 21.30) = $ 20.448

Flotation-adjusted cost of equity = (2.30 / 20.448) + 0.04

= 0.1125 + 0.04

= 0.1525 i.e., 15.25 %.

Flotation cost adjustment = Flotation-adjusted cost of equity - Cost of equity without flotation adjustment.

= 15.25 % - 12 % (given in question)

= 3.25 %.

Conclusion:- Flotation cost adjustment = 3.25 %

4 0

3 years ago

If the owner of a condominium defaults on his mortgage, the owners of the remaining units: become subject to foreclosure. must i

vladimir1956 [14]

Answer:

Are not affected by the defaulting owner’s actions

Explanation:

In this particular question, we are trying to see what becomes of the remaining owners of a condominium if the owner defaults on his mortgage.

To answer this question properly, we need to understand and know what is meant by a Condominium. A condominium generally refers to a a particular building or a building complex with a number of individually owned apartments.

After this definition, we can clearly see that a condominium exists independently of the other owners. This means if you own a Condominium, it practically means you’re responsible for whatever contract that defines your ownership and in no particular way have any business with the other independent owners of other units. This is so because, they have their own guiding laws to deal with. Hence, whatever happens, everyone would be made to give account on whatever part of the properties he own with absolutely no reference to the properties of the other members

7 0

4 years ago

A production possibilities frontier with a bowed-outward shape indicates a. increasing opportunity costs as more and more of one

Arada [10]

Answer:

a. increasing opportunity costs as more and more of one good is produced

Explanation:

A production possibility frontier is a curve that shows the two combinations of goods an economy can produce given that its resocurces are fully employed.

The production possibility curves is bowed outwards because of increasing opportunity costs as more and more of one good is produced.

If more of one good is to be produced, more of the second good would be given up to increase the production of the first good.

The attached image is the graph of a production possibility frontier. At point A, the maximum amount of good X is produced with zero quantity of good Y. To increase production of good Y and move to point B, some quantities of good X would be given up. To further increase the production of good Y and move to point C, even more quantities of good X would be given up.

I hope my answer helps you

3 0

3 years ago

The following market information was gathered for the corporation. The firm has 1,000 bonds outstanding, each selling for $1,100

Nana76 [90]

Answer:

9.127%

Explanation:

For calculating the WACC we need to do following calculations which are shown below:

value of debt = 1,000 × $1,100 = $1,100,000

cost of debt = 8% × (1 - 0.3) = 4.8%

value of equity = 50,000 shares × $18 = $900,000

value of preferred stock = 5,000 × $40 = $200,000

Now

Market value of firm = $1,100,000 + $900,000 + $200,000 = $2,200,000

The formula is shown below:

= Weightage of debt × cost of debt + (Weightage of common stock) × (cost of common stock) + (Weightage of preferred stock) × (cost of preferred stock)

WACC = ($1,100,000 ÷ $2,200,000) × 4.8% + ($900,000 ÷ $2,200,000) × 14% + ($200,000 ÷ $2,200,000) × 11%

= 9.127%

3 0

3 years ago

Gordon Industries has 6 percent coupon bonds outstanding with a face value of $1,000 and a market price of $959.21. The bonds pa

algol13

12.0 years will take for these bonds to mature.

What is a coupon in bonds?

The term "coupon," which is also sometimes referred to as "coupon payment," refers to the annual interest rate that is paid on a bond from the date of issuance until maturity. It is described as being a percentage of the bond's face value. When discussing coupons, the coupon rate is frequently employed.

How does coupon rate affect bond price?

The price of bonds is significantly influenced by the coupon rate on a bond in comparison to current market interest rates. Bond prices increase when a coupon is more than the current interest rate; prices decrease when a coupon is lower.

Learn more about coupon in bonds: brainly.com/question/22504216

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3 0

2 years ago