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Fynjy0 [20]
2 years ago
15

A company is 49% financed by risk-free debt. The interest rate is 8%, the expected market risk premium is 6%, and the beta of th

e company’s common stock is .59. a. What is the company cost of capital? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Cost of capital
Business
1 answer:
NemiM [27]2 years ago
3 0

Answer: 9.81%

Explanation:

Cost of capital = (cost of debt * weight of debt) + ( cost of equity * weight of equity)

Cost of Equity = Risk free rate + beta * Market risk premium

= 8% + 0.59 * 6%

= 11.54%

Cost of capital = (8% * 49%) + (11.54% * 51%)

= 9.81%

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Answer:

$99,800

Explanation:

The statements of cash flows show cash inflows and out flows from the business activities which are recognized as operating, investing and financing activities.

When an asset is sold, the amount received from the sale of the asset is recognized as an inflow in the investing section of the cash flow statement.

The gain/loss from the sale would have been treated in the operating section based on the effect it had in the income statement while computing the net income of the company.

4 0
3 years ago
Which of the following items would be subtracted from net income when reporting cash flows from operating activities, using the
BigorU [14]

Answer:

The correct answer is Increase in accounts payable and unearned fees.

Explanation:

An account payable consists of a debt incurred by the company directly related to the economic activity of the company. An account payable is a debtor account in a company and indicates that it has to pay its suppliers (or other creditors).

The amounts that are accounted for as accounts payable come from the purchase of goods or services in terms of credit. So, accounts payable are similar to credits with the difference that banks are not involved.

5 0
3 years ago
Is Criminal investigator a venture?<br> thanks
finlep [7]

Explanation:

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6 0
2 years ago
Read 2 more answers
To record purchases on account, Caleigh’s Company uses the perpetual inventory method and the gross method. On September 11, it
vfiekz [6]

Answer:

The company should credited on the Cash account and the Cash Discount Receipt for the settlement of the inventory with 10 days.

Explanation:

The detailed entry will be:

19th Sep

Dr Account Payable               $40,000

Cr Cash                                  $39,200

Cr Cash Discount Receipt    $800

( to record payable settlement and the receipt of cash discount)

Working note: As the company paying with 10 days, the supplier will allow a 2% discount on it net inventory purchase ( 44,000 - 4,000 = $40,000)

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7 0
3 years ago
us suppose that you open a savings account at the campus credit union. Into this savings account, you place $100 in savings. The
BartSMP [9]

Answer:

the  future value in two years is $110.25

Explanation:

The computation of the future value in two years is shown below:

As we know that

Future value = Present value × (1 +  rate of interest)^number of years

= $100  × (1  + .05)^2

= $100 ×  (1.1025)

= $110.25

Hence, the  future value in two years is $110.25

The same should be considered and relevant

5 0
2 years ago
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