Peregrine Company acquires all of the voting stock of Falcon Corporation for $65,000, in a merger. Falcon’s balance sheet reports the following asset and liability balances:Current assets
$15,000,000
Plant & equipment
60,000,000
Current liabilities
10,000,000
Long-term debt
40,000,000
Assume the book values of Falcon’s assets and liabilities equal their fair values. How much goodwill does Peregrine report at the date of acquisition?
$35,000,000
$40,000.000
$30,000
$0
Answers
Answer:
(It seems that the amount in question is wrongly typed as 65,000 instead of 65,000,000)
The correct answer is $40,000.000.
Explanation:
The answer is calculated from guidlines provided in IFRS 10.
As per accounting standards the price paid above fair value of net asset is taken as goodwill. Goodwill is accounted as asset in balance sheet.
As fair value is not given we will assume that book values are equal to fair value. The detail calculations are given below.
Consideration paid $ 65,000,000
FV of net asset ($ 25,000,000)
Goodwill $ 40,000,000
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Payments made to an insurance company in return for a policy of insurance are called :A. risk expenses B. premiums C. risk expenditures D. deductibles
A firm's current profits are $1,400,000. These profits are expected to grow indefinitely at a constant annual rate of 4 percent. If the firm's opportunity cost of funds is 7 percent, determine the value of the firm: Instructions: Enter your responses rounded to two decimal places. a. The instant before it pays out current profits as dividends. $ 49933333.33 million b. The instant after it pays out current profits as dividends.
Rates on fixed, floating, installment and mortgage loans were reduced by 0.3 percent (from 9.3% to 9.0% etc.). Which were impacted the most
Answers
Answer: D inflation adjusted, real
Explanation:
The GDP calculation acquired in the flow chart of $5,000 billion were all done after adjusting for inflation which means that they were in real dollars.
Inflation adjusted GDP enables more effective comparison between different periods as inflation tends to inflate the prices of goods and services and can make one think that the economy has grown more than it actually has.
When the value of GDP is inflation adjusted, it can then be seen just how much the economy improved or shrank.
O Tanya wants to develop a partnership with his team illustrated by reciprocal influence, mutual trust, respect and liking, and a sense of common fates.
O Tanya seeks to motivate employees to pursue organizational goals above their own self-interests.
O Tanya likes to provide the guidance and support needed by employees and ties meaningful rewards to completion of objectives.
Answers
Answer:
The correct answer is: All of the above.
Explanation:
Transformational leadership is the type of leadership that provokes change in individuals and the environment they interact with. It creates positive change in individuals to make them good leaders in the long run. Leaders guide their followers through inspiration, commitment, influence, and consideration.
Answers
Answer:
Ans. Bad Boys, Inc.’s cost of capital = 9.09%
Explanation:
hi, we need to find the cost of all the debt instruments of the problem, let´s start by stating that the cost of hte tax-deductable debt is 8% (equals to the coupon rate of the bond).
Preffered Stock
In order to find the cost of the preffered stock, we need to use the following formula.
Cost of Preffered Stock= 10%
Common Stock
To find the cost of the common stocks, we have to use the following formula.
Common Stock Cost = 12.5%
If tax rate is 35%, the cost of capital of Bad Boys, Inc is found by using the following formula.
The cost of capital is =9.09%
Best of luck.
Final answer:
The cost of capital for Bad Boys, Inc., considering their mixed financing strategy and marginal tax rate, is calculated to be approximately 9.09%. The calculation considers the costs of debt, preferred stock, and common equity, all weighted according to their proportion in the capital structure.
Explanation:
To calculate Bad Boys, Inc.’s cost of capital, we must compute the costs of debt, preferred stock, and common stock, then weight them according to their proportions in the firm's capital structure. The cost of debt (interest rate) is 8%, but because interest expense is tax deductible, we multiply this by 1 minus the tax rate: 8% * (1 - 35%) = 5.2%. The cost of preferred stock (dividend rate) is the dividend divided by the price per share: $2.50 / $25 = 10%. For common stock, we use the Gordon Growth Model to find the cost of equity: (next year’s dividend / current stock price) + growth rate of dividends: ($1.50 / $20) + 5% = 12.5%.
Now, we must weight these costs according to the proportions of capital: 5.2% * 45% (debt) + 10% * 5% (preferred stock) + 12.5% * 50% (common equity) = 2.34% + 0.5% + 6.25% = 9.09%. Thus, Bad Boys, Inc.'s cost of capital is estimated to be 9.09%. Understanding this concept allows companies to make informed decisions about future investments and financial management practices.
Learn more about Cost of Capital here:
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B) unlike inventory, are often worth their face value.
C) appreciate over time due to interest and penalties.
D) are not a significant consideration when buying anexisting business
Answers
Answer:
The correct answer is letter "A": are rarely worth their face value.
Explanation:
Accounts receivables are notes issued to customers after selling them a product or rendering services on credit. The repayment term may vary from 30, 60 or 90 days. If an account receivable is not paid after that period it could be considered as an uncollectible account which implies the company will incur losses.
Accounts receivable are hardly ever accepted at face value (real value of the moment of the purchase) because companies add the interest rate that is to be charged for the sale on the account.
B. a reduction of expenditures.
C.another financing source.
D. matured interest payments.
Answers
Answer: C. Another Financing source
Explanation:
The fund was received for the purpose of debt service. Debt service means repayment of loans. The funds were utilized for debt servicing. Hence, the amount should be reported as another financing source.
The objective of the funds was to repay loans and the amount was received for repayment. This amount was used to finance their debt service. So it was a financing source for the company.