Answer:
Provide information about the reporting entity that is useful to present and potential equity investors, lenders, and other creditors.
Explanation:
Financial reporting refers to the presentation and disclosure of financial information of an entity to the public, investors, lenders and other stakeholder.
Financial reporting is carried out by reporting financial statements (balance sheet, income statements), statement of cash flows and other relevant/necessary disclosures, notes as required by law or statute or which are essential for better comprehension of such financial information.
Such information helps lenders to know the financial health of the entity, helps investors to decide whether it would be beneficial to invest in the entity, assures government of the compliance of laws by the entity, etc.
Option b. 7.78% is the correct answer. The cost of equity from retained earnings is 7.78% as per the CAPM approach
The relationship between systematic risk, or the general dangers of investing, and expected return for assets, particularly stocks, is described by the Capital Asset Pricing Model (CAPM).
A linear relationship between the required return on investment and risk is established by this financial model.
Retained earnings refer to the total earnings that a company has generated from its operations minus the dividends distributed among shareholders. The retained earnings are earnings reinvested in the business.
The calculation is shown below.
Cost of equity = Risk-free rate + (beta * Market risk premium)
Cost of equity = 4.10% + (0.70 * 5.25%)
Cost of equity = 4.10% + 3.675%
Cost of equity = 7.77% or 7.78%
Learn more about retained earnings:
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Answer:
The correct answer is C. Discrimination is not profitable.
Explanation:
In the discrimination model, employers refuse to hire people with some characteristics that are not pleasant for them. However, this decision implies that the businesses lose time looking for the person that they require. So, it is not profitable.
Answer:
$3,123.16
Explanation:
The computation of the minimum annual payment is as follows:
Given that
RATE = 10%
NPER = 10%
PV = $9,000 × (1 + 0.1) = $9,900
FV = $0
The formula is shown below:
= PMT(RATE,NPER,-PV,FV,TYPE)
After applying the above formula, the monthly payment is $3,123.16
