Answer:
CCC's new required return be 16.5%
Explanation:
For computing the new required return, first, we have to compute the risk-free rate of return which is shown below:
Expected return = Risk- free rate of return + Beta × (Market risk - Risk- free rate of return)
12% = Risk- free rate of return + 1.5 × (10% - Risk- free rate of return))
12% = Risk- free rate of return + 15% - 1.5% Risk- free rate of return
So, the Risk- free rate of return is 6%
Now the average stock is increased by 30%
So, the new market risk is 13% and other things will remain constant
So, the new required return equal to
= 6% + 1.5 × (13% - 6%)
= 6% + 1.5 × 7
= 16.5%
Answer:
a) Bonds Payable.
Explanation:
Since there is an issue of bonds as against cash, which need to be paid back in future, amount received will be credited to bonds payable.
Further the purpose of bonds will always be to acquire a capital asset as bonds are issued for long term finance generally, therefore, the bonds will be credited as bonds payable, rather than capital contributions.
Though a general note in notes to account can be added clearly specifying the purpose of issue of bonds.
a) Bonds Payable.
Answer:
Net Income = $1,250
Explanation:
Benning Co.
Income Statement
For the Month Ended July 31, 2010
Particulars $ $
Revenues 6,000 (1)
Expenses:
Wages Expense 2,600 (2)
Supplies Expense 1,000 (3)
Utilities Expense 600
Insurance Expense 400
Depreciation Expense 150
<em>Total expenses </em><u><em> 4,750 </em></u>
Net Income $1,250
<u><em>Note:</em></u>
1. Revenues = 5,500 + 500 (Adjustment 5) = $6,000
Performed services not recorded will add.
2. Wages expense = $2,300 + 300 (Adjustment 3) = $2,600
Accrued wages not paid will add to the wages expense.
3. Supplies Expense = $1,200 - 200 (Adjustment 2) = $1,000
Supplies expense includes supplies on hand will decrease the supplies expense.
It would most likely it would be false
