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Umnica [9.8K]
3 years ago
5

Blair Madison Co. issues $1.9 million of new stock and pays $281,000 in cash dividends during the year. In addition, the company

took advantage of falling interest rates to borrow $1.59 million in a new bond issue and paid off existing bonds with a face value of $2.45 million. The company bought 509 of another company's $1,090 bonds at a $109,000 premium. The net cash flow provided by financing activities is:
Business
1 answer:
saw5 [17]3 years ago
6 0

Answer:

$759,000

Explanation:

Given that,

New stock issues = $1.9 million

Dividend paid in cash during the year = $281,000

The net cash flow provided by financing activities is:

= Million new stock issue increase in cash - Cash dividend decrease in cash + Increase in cash - Decrease in cash

= $1,900,000 - $281,000 + $1,590,000 - $2,450,000

= $759,000

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Answer:

0.09 or 9%

Explanation:

This question has some irregularities. The correct question should be :

Elinore is asked to invest $4,900 in a​ friend's business with the promise that the friend will repay $5,390 in one​ year's time. Elinore finds her best alternative to this​ investment, with similar​ risk, is one that will pay her $ 5,341 in one​ year's time. U.S. securities of similar term offer a rate of return of 7​%. What is the opportunity cost of capital in this​ case?

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Given from the question

Investment (I) = $4,900

Return on investment (ROI) in one year = $5,341

Rate or opportunity cost of capital r is given by

ROI = I × (1 + r)

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$5,341 = $4,900 + $4,900r

$5,341 - $4,900 = $4,900r

r = ($5,341 - $4,900) / $4,900

r = 0.09

Or 9% in percentage

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