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Jobisdone [24]
3 years ago
10

Maple Industries has 7 percent bonds outstanding that mature in thirteen years. The bonds pay interest semiannually and have a f

ace value of $1,000. Currently, the bonds are selling for $1,021.16. What is the firm's pre-tax cost of debt?A. 6.75%
B. 6.84%
C. 6.91%
D. 7.03%
E. 7.14%

Business
1 answer:
levacccp [35]3 years ago
5 0

Answer:

A. 6.75%

Explanation:

In this question, we use the Rate formula which is shown in the spreadsheet.  

The NPER represents the time period.  

Given that,  

Present value = $1,021.16

Future value or Face value = $1,000  

PMT = 1,000 × 7% ÷ 2 = $35

NPER = 13 years × 2 = 26 years

The formula is shown below:  

= Rate(NPER,PMT,-PV,FV,type)  

The present value come in negative  

So, after solving this, the pretax cost of debt is 6.75%     (3.38% × 2)

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The Acme Corporation has been acquired by the Conglomerate Corporation. To help finance the takeover, Conglomerate is going to l
vovangra [49]

Answer:

The one-year liquidity index for these securities is 0.862

Explanation:

For computing the liquidity index, we have to use the formula which is shown below:

= (IBM stock face value ÷ total amount of face value) × (IBM current liquidation value ÷ IBM one year liquidation value) + (GE stock face value ÷ total amount of face value) × (GE current liquidation value ÷ GE one year liquidation value) + (Treasury securities stock face value ÷ total amount of face value) × (Treasury securities current liquidation value ÷ Treasury securities one year liquidation value)

where,

total amount of face value = IBM stock face value + GE stock face value + Treasury securities face value

= $15,000 + $6,000 + $20,000

= $41,000

Now put these values to the above formula

= ($15,000 ÷ $41,000) × ($14,900 ÷ $15,500) + ($6,000 ÷ $41,000) × ($3,000 ÷ $3,400) + ($20,000 ÷ $41,000) × ($15,000 ÷ $19,000)

= 0.365 × 0.961 + 0.146 × 0.882 + 0.487 × 0.789

= 0.350 + 0.128 + 0.384

= 0.862

Hence, the one-year liquidity index for these securities is 0.862

8 0
3 years ago
"icrosoft announced a 2 for 1 stock split. Before the split they had 5.4b shares outstanding and par value was $0.0000125. Befor
aliina [53]

Answer: Balance before Split - $67,500

After Split No. of shares - 10.8 billion

After Split Par Value - $0.00000625

After Split Balance - $67,500

Explanation:

Microsoft had 5.4b shares outstanding and par value was $0.0000125.

Before the split the balance in the Common Stock account was:

We will multiply the no. Of shares outstanding by the par value.

= 5.4 billion * $0.0000125

= $67,500

After the split shares outstanding are (in billions):

The split was a 2 for 1 split meaning the shares doubled. That would mean,

= 5.4b * 2

= 10.8 billion shares outstanding

After the split par value is:

It was a 2 for 1 split. That would mean that prices had to have halved. Calculating therefore,

= $0.0000125/2

= $0.00000625

After the split the balance in Common Stock is

= 10.8 billion shares * $0.00000625

= $67,500

Balance remained the same showing that total equity remains the same. Only no of shares and price changes.

8 0
3 years ago
Read 2 more answers
Kelley Company reports $1,250,000 of net income for 2017 and declares $175,000 of cash dividends on its preferred stock for 2017
defon

Answer:

Net income available to common stockholders is $1,075,000

Explanation:

Net Income                            $1,250,000

To Preferred Shareholders   <u>$175,000    </u>

Net income available to       <u>$1,075,000</u>

common stockholders

Basic earnings per share = Net income available to common stockholders / weighted average shares of common stock

Basic earnings per share = $1,075,000 / 380,000

Basic earnings per share = $2.8290 per share.

3 0
3 years ago
The marketing department wants to buy two new computers. One computer will be used for their graphic artist to create graphics a
BartSMP [9]

Answer:

Explanation:

While buying a computer , the potential purpose and usage of the computer should as well as the component of the computer to buy should be considered in order to make a right selection .

As graphics designing software is processor intensive , a processor with a very high speed of at least 1 Ghz and an adequate RAM to aid faster process at once , minimum of 8Gb is required.

However , considering the function of a secretary which is to track billing and hours , a computer with a slower process will definitely perform the task

8 0
3 years ago
Give the journal entry (FOR FULL CREDIT ALWAYS GIVE JOURNAL ENTRIES IN PROPER FORM: see Hints/FAQ tab for guidelines) when a bui
Digiron [165]

The journal entry of a building being purchased will be, a debit in the building account by $60,000; and the cash account and payables account will be credited by $20,000 and $40,000 respectively.

<h3>What is a Journal Entry?</h3>

A method of recording the monetary transactions of a business firm throughout a financial period, in such a way that effects of the same are reflected in the financial statements, is known as recording of journal entries.

Hence, the effect of the journal entry has been given above, and an image is also provided for better understanding of the concept for the readers.

Learn more about journal entry here:
brainly.com/question/20421012

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8 0
2 years ago
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