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Alborosie
3 years ago
7

Morrow Corp. has an EBIT of $925,000 per year that is expected to continue in perpetuity. The unlevered cost of equity for the c

ompany is 13 percent and the corporate tax rate is 25 percent. The company also has a perpetual bond issue outstanding with a market value of $2.55 million.
What is the value of the company?
Business
1 answer:
Vladimir79 [104]3 years ago
7 0

Answer:

The answer is given below;

Explanation:

WACC=EBIT*(1-t)/(E+D)

13%=$925,000*(1-25%)/(E+D)

E+D=$693,750/.13

E+D=$5,336,538

Where E+D is market value of firm

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Wagner Enterprises and Stone Services both disposed of an old asset. When completing the journal entry, Wagner Enterprises inclu
In-s [12.5K]

Answer:

Wagner Enterprises and Stone Services

Disposal of old asset:

It could be that Stone Services exchanged its old asset with a new one with a company.  In that situation, the debit goes to New Equipment, while the credit is to the old Equipment.  Another reason could be that Stone Services sold the old asset on account.  In this situation, the debit goes to the Accounts Receivable account, while the old asset is credited accordingly.

Explanation:

When a company disposes of an old asset, it credits the asset account and transfers the amount to the Sale of Asset account.  The same is done for the accumulated depreciation, in reverse.  When cash is realized from the disposal, the Sale of Asset account is credited, while Cash account is debited.  Then, the difference in the Sale of Asset account will be a gain or a loss, depending on the net book value and the cash realized from the sale.

3 0
3 years ago
Assume that Corn Co. sold 7,600 units of Product A and 2,400 units of Product B during the past year. The unit contribution marg
Afina-wow [57]

,Answer: a. 9,450 units

Explanation:

You need to find the weighted average contribution margin for both products.

Product A

Weighted average contribution margin = Contribution margin * Units sold / Total units sold

= 34 * 7,600 / (7,600 + 2,400)

= $25.84

Product B

= 59 * 2,400 / 10,000

= $14.16

Breakeven point in units = Fixed costs/ (Weighted average contribution margin of both A and B)

= 378,000 / (25.84 + 14.16)

= 9,450 units

5 0
2 years ago
If the goal is to cut the total amount of smoke in half in the neighborhood, what isthe cost-effective way to do this?
Darya [45]

Answer:

He should ask nieghbors to stop

Explanation:

Because asking nice is not a bad reason

4 0
3 years ago
A dog grooming business is walking through the target market defining process and is now asking questions about its potential cu
siniylev [52]

Answer:

A

Explanation:

4 0
3 years ago
When a firm uses retained profits to invest in more energy efficient equipment, an economist would calculate the _______________
Blababa [14]

Answer:

opportunity cost

Explanation:

When a firm uses retained profits to invest in more energy efficient equipment, an economist would calculate the opportunity cost of investing in physical capital.

6 0
2 years ago
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