Answer:
A) 10.15%
Explanation:
Cost of equity (Re) = 14.06% or 0.1406
cost of preferred stock (Rp) = 7/65 = 0.10769
cost of bonds (Rb) = 7.5% or 0.075
outstanding shares = 2.5 million shares x $42 = $105 million
bonds outstanding = $1,000 x 80,000 bonds = $80 million
preferred stock = $65 x 750,000 = $48.75 million
corporate tax rate = 38% or 0.38
total market value of equity + debt (in millions) = $105 + $48.75 + $80 = $233.75
WACC = [(outstanding shares / total market value) x Re] + [(preferred stock / total market value) x Rp] + {[(bonds outstanding / total market value) x Rb] x (1 - tax rate)}
WACC = [($105m / $233.75m) x 0.1406] + [($48.75m / $233.75m) x 0.10769] + {[($80m / $233.75m) x 0.075] x (1 - 0.38)}
WACC = 0.06316 + 0.02246 + 0.01591 = 0.10153 or 10.15%
Answer:
Dr Rent revenue
Cr Unearned rent revenue, $4,500
Explanation:
Preparation of XYZ Company Journal entry
Since we were told that the Company received the amount of $18,000 on April 1, 2020 for a one year's rent paid in advance in which the transaction has a credit to a nominal account, this means we have to record the transaction by Debiting Rent revenue with 4,500 and Crediting Unearned rent revenue, with the same amount of $4,500 calculated as
(3/12 x $18,000 ).
Dr Rent revenue
Cr Unearned rent revenue, $4,500
(3/12 x $18,000 )
A fair value option is the alternative for a business to record its financial instruments at the fair values. Liabilities are company's financial debts or obligations that arise in the course of business operations. They may be long term or short term. In this case, if the fair value of the liability decreases, the firm should respond by crediting the unrealized Holding Gain/loss in the income account.
Answer: They could be considered as external stakeholders
Explanation: A stake holder, is some one or a group of people who have something, they stand to gain or loose from the existence or activities of a company or establishment, it is apparent here that the actions of the new grocery store will affect the children that play basketball on the court.
The answer is:
Traditionally, SOCIAL ENTERPRISES were always set up as non profit corporations.
