Answer:
Find it below
Explanation:
1. Expense Recognition - Record expenses in the preiod the related revenue is recognized
2. Periodicity - The life of an enterprise can be divided into artificial time periods.
3. Historical cost principle - The original transaction value or cost upon acquistion.
4. Materiality - Concerns the relative size of an item and its effect on decisions
5. Revenue recognition - Criteria usually satisfied for products at point of sale.
6. Going concern assumption - The entity will continue indefinitely
7. Monetary unit assumption - A common denominator is the dollar
8. Economic entity assumption - The enterprise is separate from its owners and other entities.
9. Full-disclosure principle - All information that could affect decisions should be reported
.
Answer: a. Issuer
Explanation:
When bonds trade at a premium, it means that the yield has fallen below the coupon rate which means that interest rates have dropped. Companies can take advantage of this to reissue new bonds at the lower interest rate so that they can save on costs.
Bonds usually have a call provision which would enable the issuer to call the bond in and pay the holder at the par value plus interest repayments at the lower yield which they will do in this case. They will then reissue new bonds at a lower rate.
Answer:
C) $27.75
Explanation:
Earnings:
2.00 x 20% = 0.4 (2.00 + 0.40 = 2.40)
2.40 x 20% = 0.48 (2.40 + 0.48 = 2.88)
2.88 x 20% = 0.576 (2.88 + 0.576 = 3.456)
3.46 x 10% = 0.346 (3.46 + 0.346 = 3.806)
3.80 x 10% = 0.38 (3.80 + 0.38 = 4.18)
Dividends:
3.46 x 50% = 1.73
3.80 x 50 % = 1.90
4.18 x 75% = 3.135 ( 50% + 25% = 75%)
P0 = 1.73/[(1.12)^4] + 1.90/[(1.12)^5] + (3.14/(0.12 - 0.05))/1.125
= 27.63
Therefore, If Bean's equity cost of capital is 12%, then the price of a share of Bean's stock is closest to $27.75
Answer:
In which of the following situations would each of the members be responsible for producing an equal share of the total amount of output sold by the cartel engaged in joint profit maximization?
When marginal costs of production are the same for each of the members of the cartel.
Explanation:
D
