Ask question

Ask question

All categories

3 years ago

6

The cost of equity is ________. the interest associated with debt the rate of return required by investors to incentivize them t

o invest in a company the weighted average cost of capital equal to the amount of asset turnover

1 answer:

kykrilka [37]3 years ago

3 0

Answer:

If an = 3n - 2 , find a2

Explanation:

If an = 3n - 2 , find a2If an = 3n - 2 , find a2

You might be interested in

_________ is a condition in which the average level of prices is actually falling.

jeyben [28]

Answer:

<em>Deflation</em>

Explanation:

<em>Deflation is the overall decrease in products and services prices when the rate of inflation drops below 0%</em>. it naturally occurs when an economy's money supply is fixed.

The buying power of currency and salaries in moments of deflation is greater than they would have been.

This is different but comparable to <em>price deflation, which is a general price level reduction.</em>

6 0

3 years ago

For each of the following items before adjustment, indicate the type of adjusting entry (prepaid expense, unearned revenue, accr

igor_vitrenko [27]

Answer:

See explanation

Explanation:

(a) Assets are understated - If we do not adjust accrued revenue, the assets are understated. For example - if we do not add any outstanding rent revenue, the assets will become understated.

(b) Liabilities are overstated - If we do not adjust unearned revenue, the liabilities are overstated. For example - if we do not deduct any expired unearned revenue, the liabilities will become overstated.

(c) Liabilities are understated - If we do not adjust accrued expense, the liabilities are understated. For example - if we do not add any outstanding rent expense, the liabilities will become understated.

(d) Expenses are understated - If we do not adjust accrued expense and prepaid expense, the expenses are understated. For example - if we do not add any outstanding rent expense and expired prepaid expenses, the expenses will become understated.

(e) Assets are overstated - If we do not adjust prepaid expense, the assets are overstated. For example - if we do not deduct any expired prepaid insurance, the assets will become overstated.

(f) Revenue is understated - If we do not adjust accrued revenue and unearned revenue, the revenue is understated. For example - if we do not add any outstanding rent revenue and expired unearned revenue, the revenue will become understated.

3 0

3 years ago

The concept of risk and return is subjective for different people, as well as for corporations.

Juli2301 [7.4K]

Answer:

Risk and Return

1. Joe is an average investor. His financial advisor gave him options of investing in stock A, with a σ of 12%, and stock B, with a σ of 9%. Both stocks have the same expected return of 16%. Joe can pick only one stock and decides to invest in stock B.

Good Financial Decision?

Yes

No

2. Marcie works for an educational technology firm that recently launched its employee stock option plan (ESOP). Marcie allocated all her investments in the ESOP.

Good Financial Decision?

Yes

No

3. rin wants to invest in a hedge fund that has had a very strong performance track record. The hedge fund has given its investors a return of over 60% for the past five years. Although Erin is tempted to put her money in the fund, she decides to conduct due diligence on the hedge fund’s assets, because she is aware that past performance is no guarantee of future results.

Good Financial Decision?

Yes

No

Explanation:

1. Joe's decision to invest in stock B is a good financial decision. Since both investments have the same returns, the decision on which investment to take shifts to the standard deviation of the returns, which specifies the variability of the returns. Invariably, the investment with less standard deviation should win the vote. Therefore, Joe's decision is a good financial decision because investment in B has a standard deviation of 9% unlike A's 12%.

2. Putting all eggs in one market as Marcie had done by allocating all her investments in the ESOP is not a good financial decision, theoretically. It is always best to spread the risks, though higher-yielding investments (returns) bear higher risks.

3. The decision of Erin to conduct due diligence on the hedge fund's assets, despite its past performance is a good financial decision. Due diligence reveals some behind-the-scene information that are instrumental in making sound business decisions. Who are the present managers of the fund? What systems are in place in the entity to guarantee similar future performance, all things being equal? What market's sentiments and information are available for consideration? These questions, and many others can be answered through a due diligence. Surely, "past performance is no guarantee of future results."

3 0

3 years ago

On January 1, 2022, Concord Company issued $2,800,000 face value, 7%, 10-year bonds at $3,006,070. This price resulted in a 6% e

yaroslaw [1]

Answer:

Concord Company

Journal Entries:

i. The issuance of the bonds on January 1, 2022:

Debit Cash $3,006,070

Credit Bonds Payable $2,800,000

Credit Bonds Premium $206,070

To record the issuance of bonds at premium.

ii. Accrual of interest and amortization of the premium on December 31, 2022:

Debit Interest expense $180,364

Debit Premium Amortization $15,636

Credit Interest Payable $196,000

To accrue interest and record premium amortization.

iii. The payment of interest on January 1, 2023:

Debit Interest Payable $196,000

Credit Cash $196,000

To record payment of interest.

iv. Accrual of interest and amortization of the premium on December 31, 2023:

Debit Interest expense $179,426

Debit Premium Amortization $16,574

Credit Interest Payable $196,000

To accrue interest and record premium amortization.

Explanation:

a) Data and Calculations:

January 1, 2022:

Face value of bonds issued = $2,800,000

Proceeds from the bonds issue 3,006,070

Bonds Premium = $206,070

Coupon interest rate = 7%

Effective interest rate = 6%

Bonds maturity period = 10 years

Payment of annual interest = each January 1

December 31, 2022:

Interest expense = $180,364 ($3,006,070 * 6%)

Cash payment = $196,000 ($2,800,000 * 7%)

Amortization of premium $15,636 ($196,000 - $180,364)

Bonds' fair value = $2,990,434 ($3,006,070 - $15,636)

December 31, 2023:

Interest expense = $179,426 ($2,990,434 * 6%)

Cash payment = $196,000 ($2,800,000 * 7%)

Amortization of premium $16,574 ($196,000 - $179,426)

Bonds' fair value = $2,973,860 ($2,990,434 - $16,574)

Analysis:

i. The issuance of the bonds on January 1, 2022:

Cash $3,006,070 Bonds Payable $2,800,000 Bonds Premium $206,070

ii. Accrual of interest and amortization of the premium on December 31, 2022:

Interest expense $180,364 Premium Amortization $15,636 Interest Payable $196,000

iii. The payment of interest on January 1, 2023:

Interest Payable $196,000 Cash $196,000

iv. Accrual of interest and amortization of the premium on December 31, 2023:

Interest expense $179,426 Premium Amortization $16,574 Interest Payable $196,000

3 0

3 years ago

Papa John's received negative publicity concerning the quality of the contents used in making their pizza. The information in th

andriy [413]

Answer: A blog

Explanation:

A blog is an online journal or website that displays information about a particular topic or product. A blog is an avenue for a writer to give their views on certain subject.

There are important reasons to start a blog. Blogging for projects or business, increases the visibility for the company. Blogging helps to get the attention of the consumers hence, connecting the company to it audience. It also boost traffic as the more one posts, the more the company is known.

6 0

3 years ago