Answer:
Please see below
Explanation:
a. A 5% stock dividend is declared and distributed when the market per share was $39.
Common stock par value($10) 500,000
Retained earning = 50,000 × 5% × 39
= $97,500
Common stock dividend distributed
50,000 × 5% × $10
= $25,000
See attached further explanations.
Answer:
Plese see explanation
Explanation:
1. Net present value of project X
Year Cash flow Present value at 16%
0 (25,000) (25,000)
1-6 8,000 29,477.89
Net present value= $4,477.89
2. Net present value of project Y
Year Cash flow Present value at 16%
0 (25,000) (25,000)
6 60,000 24,626.54
Net present value= ($373.46)
3. I will recommend Labeau Products, Ltd to invest in project X instead of project Y because the net present value of project X is positive and project x will increase the wealth of shareholders of the Labeau Products, Ltd by $4,477.89
Answer: Value creation and exchange
Explanation: Marketing refers to a group of activities such as advertising, selling and delivering the products with the objective of promoting the organisation. These activities results in either customer loyalty from existing customers or making of new customer base.
These activities creates value to the organisation by exchanging the ideas and resources.
Answer:
5.71%
Explanation:
The after tax cost of debt=pretax cost of debt*(1-t)
where t is the tax rate of 35% or 0.35
pretax cost of debt=yield to maturity
The yield to maturity can be determined using rate formula in excel as below:
=rate(nper,pmt,-pv,fv)
nper is the number of coupon interest payable by the bonds i.e 12 coupons in 12 years
pmt is the annual coupon=$1000*9.5%=$95
pv is the current market price-flotation cost=$1,100-$48=$1052
fv is the face value of $1000
=rate(12,95,-1052,1000)=8.78%
After tax cost of debt=8.78%
*(1-0.35)=5.71%
Answer:
company B
company B
Explanation:
A company has comparative advantage in production if it produces at a lower opportunity cost when compared to other companies.
Opportunity cost of producing cell phones
company A = 100 / 50 = 2
company B = 200 / 150 = 1.3
The opportunity cost of company B is lower than that of company A. Company B has a comparative advantage in the production of cell phones
A company has absolute advantage in the production of a good or service if it produces more quantity of a good when compared to other countries
Company B produces 200 computers while company A produces 100 computer. Company B has an absolute advantage in the production of computers
