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You are given the following information for Watson Power Co. Assume the company’s tax rate is 22 percent. Debt: 12,000 6.1 perce

alexgriva [62]

Answer:

You are given the following information for Watson Power Co. Assume the company’s tax rate is 22 percent. Debt: 12,000 6.1 percent coupon bonds outstanding, $1,000 par value, 27 years to maturity, selling for 109 percent of par; the bonds make semiannual payments. Common stock: 450,000 shares outstanding, selling for $63 per share; the beta is 1.14. Preferred stock: 19,500 shares of 3.9 percent preferred stock outstanding, currently selling for $84 per share. The par value is $100 per share. Market: 5 percent market risk premium and 4.9 percent risk-free rate.What is the company's WACC? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

8 0

3 years ago

On July 1, 2020, Marigold Corp. pays $13,200 to Kalter Insurance Co. for a 3-year insurance contract. Both companies have fiscal

Juliette [100K]

Answer:

For Marigold

The journal entries on July 1 , 2020 are:

Dr Insurance prepayment $13,200

Cr Cash $13,200

being insurance paid for in advance

The adjusting entry at the close of the year

Dr Insurance expense $2,200

Cr Insurance prepayment $2,200

Being insurance expense incurred in the year

The other party is Kalter insurance not Dobbs Co:

he journal entries on July 1 , 2020 are:

Dr Cash $13,200

Cr Prepaid revenue $13,200

being revenue received in advance

The adjusting entry at the close of the year

Dr Prepaid revenue $2,200

Cr Revenue $2,200

Being recognition earned in the year

Explanation:

Upon the payment of the insurance , the cash account of the paying company is credited and that of the receiving company debited .

The other entry in the paying company is insurance prepayment while that of the receiving company is prepaid revenue .

7 0

3 years ago

Another bank is also offering favorable terms, so Rahul decides to take a loan of $22,000 from this bank. He signs the loan cont

Stels [109]

Answer:

total amount that owes the bank at the end of the loan is $22897.74

Explanation:

given data

loan = $22,000

Annual rate = 8% = $\frac{8}{365}$ = 0.021192 %

time = 6 month = 183 days

solution

we get here Amount at the end of loan tenure

Amount at the end of loan tenure = Amount borrowed × FVf at 0.02192%

Amount at the end of loan tenure = $22,000 × 1.040886

Amount at the end of loan tenure = $22897.74

so total amount that owes the bank at the end of the loan is $22897.74

7 0

4 years ago

Moraine, Inc., has an issue of preferred stock outstanding that pays a $6.55 dividend every year in perpetuity. If this issue cu

Lorico [155]

Answer:

7.20%

Explanation:

In this question, we are to calculate the required return.

From the question we identify the following;

Next dividend = $6.55

required return = ?

Share price = $91

Mathematically;

share price = Dividend/Rate of return

Hence;

Rate of return = Dividend/share price = 6.55/91

Rate of return = 0.071978021978022

= 7.20%

8 0

3 years ago

In the decision-making process, you must take into account several cultural variables. Describe one of the variables associated

postnew [5]

Answer:

Explanation to this Answer is explained below in detail.

Explanation:

There is always a need to have an important control upon the decisions that we have in the business setup. Informed decision making is very necessary for business. People use different decision setups designed to help in the manufacturing process and most often come up with very fruitful decisions.

Describe one of the variables associated with risk tolerance:

One of the cultural factors associated with risk tolerance may be the threshold for when we can make decisions that are not detrimental to the cultural view of groups. We need to carefully consider our employees and make sure that our decisions are not too objective. Cultural-emotional bias can lead to decisions that can damage brand ownership throughout the business. This is very dangerous and detrimental for any company, so it is necessary to limit decisions and their consequences in terms of cultural sense to avoid any losses.

Describe one of the variables associated with internal/external locus of control:

The internal locust of control is the kind of person who is the best fit for all the jobs. So it is obvious that this person has some control over others. But there are some do's and don'ts for such kind of person as well. Such as, he has to communicate with almost everyone in the workplace. So, he must ensure neutrality in all aspects of other people with whom he is working. Such aspects are religion, race, caste. society etc. and his humor must not harm the emotions of anyone in the workplace.

Why are these important factors to consider?

In order to run business smoothly with maximum profits and best workforce and the best workplace. Effective decision making is the key to go. Hence, these variables are very important to achieve the effective business decision making in the long term.

7 0

3 years ago