Answer:
a. Debt
Explanation:
For determining the weighted average cost of capital we used the after tax cost of debt as the interest expense is the tax deductible that represents that if there is any issue of debt so it would be decreased as of tax impact
Therefore as per the given situation, the debt is selected
hence, the option a is correct
And, all the other options are wrong
Answer:
Total amount to be shown in income statement as income from this investment is $19,125
Explanation:
Item Amount
Dividend received by Howdy Doody corporation $10,125
($67,500 x 15%)
Increase in Fair value of Stock credited to $9,000
income statement ($68,000-$59,000)
Total amount shown in income statement $19,125
as income from this investment.
Conclusion: Howdy owns only 15% of the shares in Rangers hence it does not have significant influence so Fair value method for recording investment will be used. Howdy will record dividend received as income from investment and increase in fair value of investment as well.
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Answer:
<u>low opportunity cost</u>
Explanation:
<u>Opportunity cost</u> is described as a process in which an individual sacrifices something when they tend to choose one thing or option over another option or thing.
<u>Low opportunity cost: </u>The term "low opportunity cost" is determined as the possibility of an individual's chosen investment returns to be lower than the forgone investment's returns.
