Answer:
so cost of capital = 9.9 %
correct option is a 9.9%
Explanation:
given data
capital structure = 40%
common equity = 60%
tax rate = 34%
pretax cost = 8.5%
pretax cost = 10%
market price = $59
Flotation costs = $3 per share
common stock dividend = $3.15
Dividends expected to grow = 7%
to find out
cost of capital if the firm uses bank loans and retained earnings
solution
cost of retained earning = 
+ growth rate ........................1
cost of retained earning = 
+ 0.07
cost of retained earning =0.1271271186
and
cost of capital will be
cost of capital = weight for debit × ( cost of debit × ( 1 - tax rate ) ) + weight for common stock × cost of common stock
cost of capital = 0.40 × ( 8.5% × ( 1 - 0.34 ) ) + 0.60 × 0.1271271186
cost of capital = 0.0987
so cost of capital = 9.9 %
correct option is a 9.9%
Answer:
Yes. Roy can successfully challenge this arbitration award in court.
Explanation:
According to the law, an arbitration clause is a part of the contract between Roy and Secure Investments, Inc. that deals with these parties' rights and options in the event of a legal dispute over their contract. Like in most arbitration clauses, Roy and Secure Investments, Inc. must have agreed not to sue each other but instead, to resolve their disputes through the arbitration process. But the res judicata effect produced through an arbitration can either be challenged and appealed against or enforced. Roy, depending on the merits of his case, can make a successful appeal against the arbitration award and not against the arbitration itself.
Answer:
$458,000
Explanation:
The computation of the total production cost in case of 85,000 toys are produced
The fixed cost is
= Total manufacturing cost - total variable cost
= $360,000 - $140,000
= $220,000
And, the variable cost per unit is
= $140,000 ÷ 50,000 toys
= $2.8
So for 85,000 toys, the total production cost is
= Fixed cost + Variable cost × variable cost per unit
= $220,000 + 85,000 toys × $2.8
= $220,000 + $238,000
= $458,000
Answer:
Explanation:
The journal entry is shown below:
1. Accounts receivable A/c Dr $160
To Sales discounts forfeited $160
(Being sales discount is recorded)
The computation of the sales discount is shown below:
= (Sales value - payment made) × discount rate
= ($40,000 - $24,000) × 1%
= $160
2. Cash A/c Dr $16,000
To Accounts receivable A/c $16,000
(Being cash is received)
