Answer:
The risk premium is 4.4%
Explanation:
The risk premium on any given investment is the difference between the risky investment and the risk free investment and in this case we know treasury bonds are risk free and offer a certain return of coupons because they come from governments rather than the fictional ones like the one from risky investment inc so to find the risk premium we say :
Risk Premium = Risky investment rate - Risk free investment Rate
= 7.3% - 2.9%
= 4.4%
Answer:
Dividends are fixed. ⇒ Consistent with Debt
Fixed dividends makes preferred shares consistent with debt because debt repayments are made in equal payments as well.
Usually has no specified maturity date ⇒ Consistent with Equity.
Equity has no set maturity date unlike debt and preferred stock has no maturity date either so is much like equity in this regard.
Cost of preferred stock.
Preferred stock is like a perpetuity. The cost of preferred stock is therefore:
= Constant dividend / Price of stock
= 13 / 130.45
= 9.97%
= 10%
Answer: $40,000
Explanation:
Kline brings in equipment that is worth $60,000 but has a basis of $45,000.
The equipment however is subject to a loan of $10,000.
This loan will have to be deducted from the basis. The partnership however is assuming the loan and Kline is only 50% liable in the partnership so Kline's basis will only be affected by half of the loan.
Basis = 45,000 - 5,000
= $40,000
Answer:
The separate-entity assumption
Explanation:
The separate-entity assumption is a principal in accounting according to which the financial transactions of a business and the personal expenses of the owners is to kept separate from each other. The expenses derived solely for the business is only to be counted under the expenses of the company. Inclusion of any personal expenses of the owner or any partner of the business is prohibited under this principal.
In the given excerpt, the owner of Shady Grove Company had violated the separate-entity assumption by including the expenses of his personal items under the name of the Company.
<span>Reliability requirements describe the dependability of a system such as service outages and incorrect processing.
in FURPS+ acronym, R stands for reliability in which we check for system failures predictable, accuracy, recoverable etc.
F stands for functionality, u stands for usability, R for reliability, P for performance, S for supportability and Plus for other constraints. Robert Grady of HP devised this FURPS+ acronym.
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