Answer:
the estimation of the cost of equity is 7.4%
Explanation:
The computation of the estimation of the cost of equity is shown below:
Here we used the Capital Asset Pricing model formula i.e.
Cost of equity = Risk free rate + Beta × market risk premium
= 6% + 0.20 × 7%
= 6% + 1.4%
= 7.4%
Hence, the estimation of the cost of equity is 7.4%
We simply applied the above formula so that the correct value could come
And, the same is to be considered
Answer:
not good and inappropriate for this type of client.
Explanation:
AAA-rated municipal bonds generally yield very low interest rates and if this client is very young (only 25 years old), doesn't have a lot of money, and has an aggressive growth objective, he/she should invest in more riskier securities that can possibly yield higher returns, e.g. stock market. This client needs higher returns, and investing in low risk and low return securities will not be suitable for him/her. This type of investment is best for retired people that actually have accumulated a large capital.
Prepare the journal entries for the issuance of the bonds by Gless and the purchase of the bond investment by Century.
Answer:
$500 favorable
Explanation:
Given;
Number of units produced = 10,800 units
Actual indirect material costs = $13,000
Reflected indirect material costs for 144,000 units = $180,000
Now,
Per unit reflected indirect material costs = $180,000 ÷ 144,000
= $1.25 per unit
Therefore,
Budgeted indirect material cost for actual units produced
= $1.25 × 10,800
= $13,500
since,
the budgeted cost for indirect material cost for actual units produced is more than the actual indirect material cost, therefore
the indirect material costs in October is favorable
amount = Budgeted cost - Actual cost
= $13,500 - $13,000 = $500 favorable
