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krok68 [10]
3 years ago
15

Adamson Corporation is considering four average-risk projects with the following costs and rates of return:

Business
1 answer:
Jlenok [28]3 years ago
7 0

Answer:

a. Cost of debt = Interest * (1 - Tax rate)

= 10%*(1 - 0.30)

= 7%

Cost of preferred stock = Dividend/ Issue price

= 5/48

= 10.42%

Cost of common stock (Cost of retained earnings) = (D1/P0) + g

= (4/33) + 0.07

= 0.12 + 0.07

= 0.19

= 19%

b. Fund                         Cost        Weight       Cost * Weight

Debt                           7%          0.15                 1.05%

Preferred stock        10.42%     0.10                1.042%

Retained earnings     19%         0.75               <u>14.25%</u>

WACC                                                               <u>16.342%</u>

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Carlos transfers property with a tax basis of $965 and a fair market value of $1,135 to a corporation in exchange for stock with
nexus9112 [7]

Answer:

$1,032

Explanation:

Calculation for the corporation's tax basis in the property received in the exchange

Based on the information given we were been told that he made a transfer of property with a TAX BASIS of the amount of $965 which as well include a FAIR MARKET VALUE of the amount of $67 which simply indicates or means that the amount of $1,032 ($965+$67) is the tax basis amount of the property that was received in the exchange.

Tax BASIS =Tax basis +Fair market value

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Tax BASIS=$1,032

Therefore the corporation's tax basis in the property received in the exchange will be $1,032.

8 0
3 years ago
Three stocks have share prices of $12, $75, and $30, and havetotal market values of $400 million, $350 million, and $150 million
aniked [119]

Answer:

39

Explanation:

A price-weighted index can be described as a stock index in which the fraction of each company included in the index in the total index is proportional to each company’s stock price per share. Therefore, the higher the stock price per share of a company, the greater its effect on the performance of the index. Conversely, the lower the stock price per share of a company, the lower its effect on the performance of the index.

The price-weighted index is calculated as the sum of the price of each stock in the index divided by the total number of companies being considered in the index.

For this question, the index value for the price-weighted index can therefore be calculated as follows:

Index value = (12 + 75 + 30) ÷ 3 = 39

Therefore, the index value is 39.

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Charra [1.4K]

Answer:

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The most important element in starting a business is funding

<u>Human Resources: Employees</u>

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