Answer: Improve skill variety
Explanation:
The logic behind improving skill variety in job design is that it will reduce boredom and also better challenge employees, this way, it will make the job for challenging thereby providing motivation and also increasing job satisfaction. Employees opinion can also be included in the formation of the job design as this will give them a sense of importance while incorporating those ideas that will make them perform the job effectively.
Answer:
b. $530
Explanation:
As provided retained earnings opening balance = $475
Add net income for the year = $130
Balance = $605
Further dividend is paid, which reduces the balance of retained earnings = $75
Balance after paying dividends = $605 - $75 = $530
All the other information provided in question relates to common stock and has no relevance on retained earnings balance.
Therefore, balance of retained earnings at the end of period = $530
b. What is the company's unlevered cost of equity capital?
c-1. What would the cost of equity be if the debt-equity ratio were 2?
c-2. What would the cost of equity be if the debt-equity ratio were 1.0?
c-3. What would the cost of equity be if the debt-equity ratio were zero?
Answer: a. WACC = Ke(E/V} + kd(D/V)(1-T)
9.1 = ke(100/160) + 6.4(60/160)(1-0.22)
9.1 = ke(0.625) + 2.4(0.78)
9.1 = 0.625ke + 1.872
9.1-1.872 = 0.625ke
7.228 = 0.625ke
ke = 7.228/0.625
ke = 11.56%
b. WACC = Ke(E/V)
9.1 = ke(100/160)
9.1 = 0.625ke
ke = 9.1/0.625
ke = 14.56%
c-1. WACC = Ke(E/V} + kd(D/V)(1-T)
9.1 = ke(1/3) + 6.4(2/3)(1-0.22)
9.1 = 0.3333ke + 3.328
9.1 - 3.328 = 0.3333ke
5.772 = 0.3333ke
ke = 5.772/0.3333
ke = 17.32%
c-2. 9.1 = ke(1/2) + 6.4(1/2)(1-0.22)
9.1 = 0.5ke + 2.496
9.1 - 2.496 = 0.5ke
6.604 = 0.5ke
ke = 6.604/0.5
ke = 13.21%
c-3. 9.1 = ke (0/0) + kd (0/)
ke = 0%
Explanation:
a. in the a part of the question, the debt-equity ratio was 0.6 ie 60/100. Thus, the value of the firm equals 160. The figures given in the question were substituted in the formula. Cost of equity was not provided, therefore, it becomes the subject of the formula. The variables are defined as follows:
ke = Cost of equity = ?
kd = Cost of debt = 6.4%
E = Value of equity = 100
D = Value of debt = 60
V = Value of the firm ie E + D = 100 + 60 = 160
T = Tax rate = 22% = 0.22
b. In this part of the question, only equity would be considered since we are calculating unlevered cost of equity. The part of the formula that deals with debt will be ignored.
c-1. In this case, the debt-equity ratio is 2. Therefore, debt equals 2 while equity is 1. The value of the firm becomes 3. There is need to substitute these values in the original formula while other variables remain constant.
c-2. In this scenario, the debt-equity ratio is 1. Thus, equity is 1 and debt is also 1. The value of the company changes to 2. These new values would be substituted in the formula in order to obtain the new cost of equity.
c-3. since the debt-equity ratio is 0, therefore, the cost of equity equals 0.
a. The company's cost of equity capital is 8.6014%. b. The company's unlevered cost of equity capital is 5.8729%. c-1. If the debt-equity ratio were 2, the cost of equity would be 8.6788%. c-2. If the debt-equity ratio were 1.0, the cost of equity would be 8.8894%. c-3. If the debt-equity ratio were zero, the cost of equity would be 5.8729%.
a. The formula to calculate the cost of equity capital is: Cost of Equity = WACC - (Debt/Equity) * (WACC - Cost of Debt) * (1 - Tax Rate). So, by plugging in the given values, we get Cost of Equity = 9.1% - 0.6 * (9.1% - 6.4%) * (1 - 0.22) = 9.1% - 0.6 * 2.7% * 0.78 = 9.1% - 0.4986% = 8.6014%.
b. The unlevered cost of equity capital can be calculated using the formula: Unlevered Cost of Equity = Cost of Equity / (1 + (Debt/Equity) * (1 - Tax Rate)). So, by plugging in the given values, we get Unlevered Cost of Equity = 8.6014% / (1 + 0.6 * 0.78) = 8.6014% / 1.468 = 5.8729%.
c-1. If the debt-equity ratio were 2, the new cost of equity can be calculated using the same formula as in part a. By plugging in the new debt-equity ratio, we get Cost of Equity = 9.1% - 2 * (9.1% - 6.4%) * (1 - 0.22) = 9.1% - 2 * 2.7% * 0.78 = 9.1% - 0.4212% = 8.6788%.
c-2. If the debt-equity ratio were 1.0, the new cost of equity can be calculated using the same formula as in part a. By plugging in the new debt-equity ratio, we get Cost of Equity = 9.1% - 1.0 * (9.1% - 6.4%) * (1 - 0.22) = 9.1% - 1.0 * 2.7% * 0.78 = 9.1% - 0.2106% = 8.8894%.
c-3. If the debt-equity ratio were zero (meaning no debt), the new cost of equity would be the same as the unlevered cost of equity calculated in part b, which is 5.8729%.
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Answer:
$6400
Explanation:
Working capital is the net of current asset and current liabilities. it is a financial measure that gives insight into how liquid a company is considering that it shows whether or not the current assets can be used to settle the current obligations or liabilities of the company adequately.
The change in property, plant, and equipment of $48,000 is not an element of working capital, Hence change in working capital
= $8700 - $2300
= $6400
Answer:
1. Share of Ann's Loss: $31,048
2. Share of Becky's Loss: $60,000
3. Maximum Loss Allowed: $41,300
Explanation:
The total loss for the year is $120,000 and both Ann and Becky own 50% each.
1. Share of Ann's Loss:
Ann had ownership of Whitman Inc. for 189 days which means the 50% of the total loss would be further lessened by 189/365 factor.
Mathematically:
Ann's Loss = $1,20,000 * 50% * (189/365) = $31,048 Loss
2. Share of Becky's Loss:
This means that the share of loss for Becky would be = $120,000 * 50%
= $60,000
3. Maximum Loss Allowed:
As the stock basis is $41,300, hence the maximum loss for Becky would be $41,300.
Answer:
Equivalent units for conversion cost is 10,790 units
Explanation:
Completed and Transferred (1,030 + 10,000 - 400) x 100 % = 10,630
Ending Work In Process 400 x 40% = 160
Total equivalent units for conversion cost = 10,790
What was the cash flow to stockholders for the year?
Answer:
$169,000 negative
Explanation:
Equity = Common stock + Additional paid in surplus
Total equity at beginning= Common stock + Additional paid in surplus
=136,000+2,610,000=$2,746,000
Total equity at end= Common stock + Additional paid in surplus
=146,000+2,910,00)=$3,056,000
Hence new equity = Total equity at End - Total equity at beginning
3,056,000-2,746,000=$310,000
Cash flow to stockholders = Dividends paid - New equity
= 141,000-310,000
= -169,000
=$169,000 negative