Answer:
Simple structure depends on owner supervision to look after the all activities that performed during the task.
Explanation:
Simple structure depends on owner supervision to look after the all activities that performed during the task. Therefore it become sometimes more difficult to look on every activities and this become more critical and complex when company grows.
it is very simple design in any business. as in case of small business where owner itself act as manager to operate all activities at his/her level
Answer:
Expected return on equity is 11.33%
Explanation:
Using Weighted Average Cost Capital without tax formula, overall rate of return is given by the formula:
WACC=(Ke*E/V)+(Kd*D/V)
Kd is the cost of debt at 6%
Ke is the cost of equity at 12%
D/E=1/2 which means debt is 1 and equity is 2
D/V=debt/debt+equity=1/1+2=1/3
E/V=equity/debt+equity=2/1+2=2/3
WACC=(12%*2/3)+(6%*1/3)
WACC=10%
If the firm reduces debt-equity ratio to 1/3,1 is for debt 3 is for equity
D/V=debt/debt+equity=1/1+3=1/4
E/V=equity/debt+equity=3/1+3=3/4
WACC=10%
10%=(Ke*3/4)+(6%*1/4)
10%=(Ke*3/4)+1.5%
10%-1.5%=Ke*3/4
8.5%=Ke*3/4
8.5%=3Ke/4
8.5%*4=3 Ke
34%=3 Ke
Ke=34%/3
Ke=11.33%
Answer:
True
Explanation:
- A chart of accounts is a list of all accounts with the detail of every transaction, as well as the running balances.
A chart of accounts (COA) is a financing tool that provided a list of every account in a system. Connected to those accounts is every detail of transactions made and running balances.
Answer:
The correct option is D,default risk differences
Explanation:
Default risk is the risk which stems from the fact that the borrower might fail to discharge its obligation in paying interest and principal as and when due as contained in the debt contract agreement.
The investor is expected to be compensated for default risk,in other words,highly risky investment pays a spread over and above risk free investment return.
Government Treasury Notes are risk-free,pays zero compensation for default risk, while corporate bonds that more riskier pays a little extra to entice investors to invest in their bonds,otherwise the planned amount expected from bond issuance would not be realized.
