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aniked [119]
3 years ago
11

If a firm has a cost of equity of 15 percent, and the firm is 100 percent equity financed. The firm is contemplating a $150 mill

ion expansion of its existing operations, funded by selling new stock. Flotation costs will run 10 percent of the amount issued. When flotation costs are considered, what is the cost of expansion?
a. $135 million
b. $150 million
c. $166.67 million
d. $175 million
e. $185.67 million
Business
1 answer:
Nikolay [14]3 years ago
4 0

Answer:

c. $166.67 million

Explanation:

cost of expansion = new equity issued / (1 - flotation costs)

cost of expansion = $150 million / (1 - 10%) = $150 million / 90% = $166.67 million

Flotation costs increase the cost of equity, since they are an expense that decreases the net amount of money received by a corporation when it issued new stocks or new bonds.

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Growers Mart buys one hundred cases of berries from Hilltop Farms. The parties agree that the berries will be transported "F.O.B
77julia77 [94]

Answer:

Grower Mart

Explanation:

("FOB shipping point" or "FOB origin")is a term that stands for from the point of origin.  This means that the buyer incur any risk and takes delivery of  the goods once the seller ships the goods.  The supplier records it as a sale at the point of departure from its shipping dock. meaning that the purchaser pays the shipping cost from the factory or warehouse and gains ownership of the goods as soon as it leaves its point of origin.

When the term "F.O.B. Hilltop Farms" it means it is from the point of origin

6 0
3 years ago
For what type of financial aid can you apply through the FAFSA?
Delvig [45]

Answer:

You use it to apply for Federal student financial aid, such as grants, loans, and work-study.

Explanation:

Hope it helps and have a good day

8 0
3 years ago
Read 2 more answers
During the months of January and February, Hancock Corporation sold goods to three customers. The sequence of events was as foll
hram777 [196]

Answer:

the net sales for the two months is $2,448

Explanation:

The computation of the net sales for the two months is shown below:

= Sale made on Jan 6 + sale made on Jan 6 + sales made on Feb 28 - discount on sale made on Jan 6

= $1,400 + $690 + $400 - ($1,400 × 3%)

= $2,490 - $42

= $2,448

hence, the  net sales for the two months is $2,448

The same is to be considered

5 0
2 years ago
On june 30, 20x1, after paying the semiannual interest due and recording amortization of bond discount, hake redeemed its 15-yea
Leokris [45]

Amount of interest expense on 30th June 20X1= Carrying Amount of Bond*Effective Interest Rate (For 6 Months)

=$940000*5/100

=$47000

Contractual Interest of the bond=Face Value*Contractual Interest

=1000000*4/100

=$40000

Thus, Carrying Amount of Bond=Carrying Amount|+Interest Expense-Interest Paid

Carrying Amount as on 30th June=940000+47000-40000

Carrying amount as on 30th June=$947000

Amount Paid to Redeem Bonds =$1020000

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3 years ago
What is the starting salary of a novel author or novelist? it's for a project.​
jenyasd209 [6]

Answer:

The average one is $49,046. Found it online.

3 0
2 years ago
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