<span>During the recession witnessed in early 2001, many firms laid off their employees and downsized. The reason for the downsizing of employees from these firms in 2001 was the incompetency and poor performance of the employees. It may sound mean but to the company, this is advantageous since they can reduce the costing while at the same time maintain or increase the final goods.</span>
Answer:
C. Retained earnings increased $28,200 during 2018.
Explanation:
Total liabilities = Total assets - Total equities
= $217,000 - $123,000
= $94,000
Common stock as at December 31, 2018 = Total equity - Total retained earnings
= $123,000 - $83,000
= $40,000
Retained earnings at year end =
Opening retained earnings + net income - dividend paid
$83,000 = Opening retained earnings + $33,900 - $5,700
$83,000 = Opening retained earnings + $28,200
Opening retained earnings = $54,800
Change in retained earnings = Closing retained earnings - Opening retainer earnings
= $83,000 - $54,800
= $28,200
Therefore, Option 'C' is the correct option.
Answer:
Cost of equity, re= 0.098356 or 9.84 %
Explanation:
D1 = $ 1.25
P0 = $ 27.50
gL = 5 % = 0.05
F = 6 % = 0.06
Cost of equity, re can be calculated using the formular below:
Cost of equity, re = D1/ {P0 x (1- F)} + gL
= $ 1.25 / {$ 27.50 x (1- 0.06)} + 0.05
= $ 1.25 / ($ 27.50 x 0.94) + 0.05
= $ 1.25 / 25.85 + 0.05
= 0.048356 + 0.05
Cost of equity, re= 0.098356 or 9.84 %
Answer:
The explanation is given as follows.
Explanation:
<u>Task 1: </u>
<u>The higher the percentage of assets a bank holds as loans, the higher the capital requirement.</u>
When the owners of the bank borrow $100 to supplement their existing reserves , both reserves and debt increase by $100 , therefore increase in debt as in any balance sheet , the total value of accounts on the left hand should be equal to the right hand , so when there is increase in reserves , there will be increase in debt.
<u>Task 2:</u>
<u>It specifies a minimum leverage ratio for all banks
</u>
leverage ratio initially = total assets / capital = 1750 / 125 = 14
leverage ratio new value = total assets / capital = 1850 / 125 = 14.8 ( the assets increase by $100 with increase in reserves)
<u>Task 3</u>
<u>Its intended goal is to protect the interests of those who hold equity in the bank.</u>
Capital requirement are there to ensure that bank have enough capital to repay the depositors and debtors and if a bank holds a higher percent of risky assets , capital requirements will be higher so that the bank remains solvent hence option a is right answer.
<u>Operations:</u> readies products and services for production and delivers them to market
<u>Marketing</u>: finding, targeting, attracting and connecting with the right customers
<u>Finance</u>: debt, stock, and owner's funds
<u>Strategy</u>: Deals with challenges in the ever-changing marketplace
