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2 years ago

Feldspar Inc. is considering the capital structure for a new division. Management has been given the following cost information:

Business

1 answer:

34kurt2 years ago

8 0

Answer:

Option 4

Explanation:

In this question ,we have to compute the WACC which is shown below:

= Weightage of debt × cost of debt × ( 1- tax rate) + (Weightage of common stock) × (cost of common stock)

For Option 1, it would be

= (0.3 × 10%) × ( 1 - 40%) + (0.7 × 12.5%)

= 1.8% + 8.75%

= 10.55%

For Option 2, it would be

= (0.4 × 10.5%) × ( 1 - 40%) + (0.6 × 13%)

= 2.52% + 7.8%

= 10.32%

For Option 3, it would be

= (0.5 × 11%) × ( 1 - 40%) + (0.5 × 13.5%)

= 3.3% + 6.75%

= 10.05%

For Option 4, it would be

= (0.6 × 11.7%) × ( 1 - 40%) + (0.4 × 14.2%)

= 4.212% + 5.68%

= 9.89%

For Option 5, it would be

= (0.7 × 13%) × ( 1 - 40%) + (0.3 × 15.5%)

= 5.46% + 4.65%

= 10.11%

So based on this, the management should accept option 4 as it derives the best debt asset ratio

The weightage of equity would be come

= 1 - weightage of debt

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Khalid has just found out that his friend Jason is terminally ill.This has made him feel sad and lonely at the thought of living

Paha777 [63]

Answer:

B) Anticipatory Grief

Explanation:

As Khalid has found out that his friend Jason is terminally ill. This has made him feel sad and lonely at the thought of living life without his friend. Khalid's feelings best represent the concept of anticipatory grief which refers to the feeling of sadness and grief occurring before the actual happening of that loss. We become sad and emotional even before the actual happening of some incident. For example, when our dear friend is in hospital after a sever accident, then we start feeling this anticipatory grief that the chances are more that he will be dead soon so we feel more grief and sadness.

6 0

1 year ago

Suppose that the central bank must follow a rule that requires it to increase the money supply when the price level falls and de

Ann [662]

Answer:

A). Decrease the money supply so interest rates rise.

Explanation:

This could be explained simply because change in money supply results in changes in price levels and/or a change in supply of goods and services. An increase in money supply results in a decrease in the value of money because an increase in money supply causes a rise in inflation. As inflation rises, the purchasing power, or the value of money, decreases.

A change in interest rates is one way to make that correspondence happen. A fall in interest rates increases the amount of money people wish to hold, while a rise in interest rates decreases that amount. A change in prices is another way to make the money supply equal the amount demanded.

6 0

1 year ago

Read 2 more answers

Assume you are the CEO of Black Diamond, a global organization. You realize that some of the people in your organization are hig

const2013 [10]

Answer:

a. High uncertainty avoidance.

Explanation:

Cultures that have high uncertainty avoidance have a low tolerance for situations that are unclear and vague. They tend to avoid risk, follow laid down rules, and favor well structured environments.

People from cultures with high uncertainty avoidance will be ideal for the Black Diamond team. They will function well in a structured team where members collaborate to achieve set goals.

3 0

2 years ago

Kirova Company has provided the following information: Number of issued common shares, 990,000 Net income, $1,436,500 Number of

Anestetic [448]

Answer:

$1.7

Explanation:

From the question above Kirova company recorder the following information

Number of issued common shares is 990,000

Net income is $1,436,500

Number of authorized common share is 1,000,000

Weighted average income of outstanding common shares is 845,000

Number of treasury shares is 145,000

The formular to calculate the earning per share is

= Net income/Outstanding shares

Net income= $1,436,500

Outstanding shares= number of issued common shares- number of treasury shares

= 990,000-145,000

= 845,000

Therefore, the earnings per share can be calculated as follows

= 1,436,500/845,000

= $1.7

Hence Kirova's earning per share is $1.7

7 0

1 year ago

Denton Company manufactures and sells a single product. Cost data for the product are given below:

marissa [1.9K]

Answer:

1. The unit product cost under absorption costing and variable costing.

Product Cost : Absorption Costing = $23,44

Product Cost : Variable Costing = $19.00

2. Contribution format variable costing income statements for July and August.

July August

Sales 1,196,000 1,612,000

Less Cost of Sales : (437,000) (513,000)

Opening Stock 0 76,000

Add Production 513,000 513,000

Less Closing Stock (76,000) (76,000)

Contribution 759,000 1,099,000

Less Expenses :

Selling and administrative expenses

Variable : (23,000) (21,000)

Fixed : (169,000) (169,000)

Net operating income 567,000 909,000

3. Reconcile the variable costing and absorption costing net operating income

July August

Absorption costing net operating income $584,760 $891,240

Add Fixed Costs in Opening Inventory $17,760

Less Fixed Costs in Closing Inventory ($17,760)

Variable costing net operating income $567,000 $909,000

Explanation:

Product Cost : Absorption Costing = All Manufacturing Costs (Fixed and Variable)

= $5+$11+$3+($120,000/27,000)

= $5+$11+$3+$4.44

= $23,44

Product Cost : Variable Costing = Variable Manufacturing Costs

= $5+$11+$3

= $19.00

6 0

1 year ago