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Crank
4 years ago
14

Honeycutt Co. is comparing two different capital structures. Plan I would result in 12,700 shares of stock and $109,250 in debt.

Plan II would result in 9,800 shares of stock and $247,000 in debt. The interest rate on the debt is 10 percent. The all-equity plan would result in 15,000 shares of stock outstanding. Ignore taxes for this problem. a. What is the price per share of equity under Plan I
Business
1 answer:
velikii [3]4 years ago
4 0

Answer: $47.50

Explanation:

The price pr share given debt and the number of shares if the company had both an all equity structure and a mixed structure can be expressed as;

Price per Share = Debt Value / (Number of Shares under All-equity plan - Number of shares under mixed plan)

Price per share = 109,250 / (15,000 - 12,700)

= 109,250 / 2,300

= $47.50

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BKK Corporation sells headphones with a unit selling price of $200 and a contribution margin ratio of 40%. Unit variable costs a
VMariaS [17]

Based on the selling price and the variable costs, the new contribution margin ratio would be<u> 35%.</u>

<h3>What would be the new contribution margin ratio?</h3>

First find the new contribution margin which is:
= Selling price - Variable cost

Solving gives:

= 200 - ( (60% x 200) + 10)

= 200 - (120 +10)

= $70

The contribution margin ratio will be:

= Contribution margin / Selling price

= 70/ 200

= 35%

Find out more on contribution margin at brainly.com/question/24881206.

6 0
3 years ago
Katrina received $2000 as a graduation gift. She is heading off to college in the fall and the money will be used to pay for sch
Irina18 [472]

The differences between saving and investing are:

Money can more easily be withdrawn when money is saved than when money is invested.

There is little or no risk of loss of money when money is saved. Money can be lost when invested.

My advice to Katrina would be to save her gift.

<h3>Why should Katrina save her money? </h3>

Katrina needs her money in the short term. Thus, it is better to save because it would be easier to withdraw her account from a savings account when compared to an investment account.

Money that should be invested should be money you don't mind losing. This is due to the risk associated with investing. Katrina needs the money to pay for her school expenses. This makes investing an impractical idea.

To learn more about investing, please check: To learn more about treasury notes please check: brainly.com/question/26164549

8 0
2 years ago
Fixed expenses are $384,000 per month. The company is currently selling 6,000 units per month. The marketing manager would like
allochka39001 [22]

Answer:

A reduction of $12,500 in net operating income

Explanation:

The net operating income/loss is the difference between the sales and the total costs.

The change in the company's net operating income is the net of the increased commission and the total decrease in salaries. The commission is a variable cost that is dependent on the total number of units sold.

Hence the overall effect on the company's monthly net operating income of this change

= $46,000 - ($9 * 6500)

= ($12,500)

6 0
4 years ago
How could the journalist improve this article to be less biased?
liubo4ka [24]

We need to see the article to give the best answer, but the closest choice would be <u>D.</u>

Giving both sides of the story is one way to avoid bias (aka favoring) toward one side.

7 0
4 years ago
You hold bonds issued by the city of Sacramento, California. The interest you earn each year on these bonds a. is not subject to
Anna35 [415]

Answer: a. is not subject to federal income tax and so these bonds pay a lower interest rate than otherwise comparable bonds issued by the U.S. government

Explanation:

Federal income taxes are the taxes that are used in the provision of national programs like settling national debt, infrastructural development, national defense, law enforcement etc.

If an individual owns bonds that are issued by the city of Sacramento, California, it should be noted that the interest that is earned each year on these bonds is not subject to federal income tax and so these bonds pay a lower interest rate than otherwise comparable bonds issued by the U.S. government. Comparable bonds that are being issued by the United States government pay an higher interest.

5 0
3 years ago
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