44,000 shares of common stock outstanding at a market price of $32 a share. The common stock will pay a $1.50 annual dividend and has a dividend growth rate of 3.5 percent. There are 7,500 shares of 9% preferred stock outstanding at a market price of $92 a share. The outstanding bonds mature in 11 years, have a total face value of $825,000, a coupon rate of 6.5 percent, a face value per bond of $1,000, and a market price of $989 each. The tax rate is 35 percent. What is the weight of equity in to be use to calculate the firm's WACC?

Answers

Answer 1

Answer:

Answer:

The weight of equity in to be use to calculate the firm's WACC is 0.48 or 48%

Explanation:

The weight of equity to be used in firm's WACC computation is market value of equity divided by the sum of market value of equity ,preferred stock and bonds.

Market value of equity=44,000*$32 =$1,408,000.00

Market value of preferred stock=7,500*$92 =$690,000

Market value of bonds=$825,000*$989/$1000=$815,925.00

Sum of market values =$ 2,913,925.00

Weight of equity=market value of equity/Sum of market values=$1,408,000.00/$2,913,925.00= 0.48 =48%

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Askew Company uses a periodic inventory system. The June 30, 2018, year-end trial balance for the company contained the following information: Account Debit Credit Merchandise inventory, 7/1/17 32,800 Sales 388,000 Sales returns 12,800 Purchases 248,000 Purchase discounts 6,800 Purchase returns 10,800 Freight-in 18,600 In addition, you determine that the June 30, 2018, inventory balance is $40,800. Required: 1. Calculate the cost of goods sold for the Askew Company for the year ending June 30, 2018. 2. Prepare the year-end adjusting entry to record cost of goods sold.
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Seasons Construction is constructing an office building under contract for Cannon Company and uses the percentage-of-completion method. The contract calls for progress billings and payments of $1,550,000 each quarter. The total contract price is $18,600,000 and Seasons estimates total costs of $17,750,000. Seasons estimates that the building will take 3 years to complete, and commences construction on January 2, 2018. 18). Seasons Construction completes the remaining 25% of the building construction on December 31, 2020, as scheduled. At that time the total costs of construction are $18,750,000.What is the total amount of Revenue from Long-Term Contracts and Construction Expenses that Seasons will recognize for the year ended December 31, 2020?

Revenue Expenses

(A) $18,600,000 $18,750,000

(B) $4,650,000 $ 4,687,500

(C) $4,650,000 $ 5,250,000

(D) $4,687,500 $ 4,687,500

Answers

Answer:

Explanation:

total contract price is $ 18,600,000

season construction using percentage of completion method.

Amount of revenue & construction expense for the year ended december 31, 2020 will be

25% of $ 18,600,000 revenue = $ 4,650,000

25% of $ 18,750,000 total cost = $5,250,000

U.S. residents accounted for over 75 percent of cruise ship passengers, and U.S. ports had 8 million passengers leaving on cruises in 2004. The growth in cruise travel was phenomenal after the terrorist attacks on September 11, 2001. According to a situational analysis, this event created an _____ for the industry.

Answers

Answer: External opportunity

Explanation:

External opportunities are legal, political, economical, social, technological, environmental and cultural factors that may benefit an organization. External opportunities are beyond the control the organization.

In the scenario illustrated, the act of terrorism in the United States on 11th September 2001, led to a growth in cruise travel. This is an example of external opportunity as the growth wasn't caused by an internal factor.

n its 2016 annual report, Kohl's Corporation reported the following (in millions): Total assets $13,574 Total shareholders' equity $ 5,177 Total liabilities $ 8,397 What proportion of Kohl's Corporation is financed by nonowners?

Answers

Answer:

Proportion of Kohl's Corporation financed by non-owners = approximately 61.9%

Explanation:

The formula used for calculating the proportion financed by non-owners is given as:

Proportion of Kohl's Corporation financed by non-owners = liabilities / total assets

As total assets in the annual report of Kohl's Corporation = $13,574

and total liabilities in the annual report of Kohl's Corporation = $ 8,397

therefore by putting the values in the above formula, we get

Proportion of Kohl's Corporation financed by non-owners = 8397 / 13574

Proportion of Kohl's Corporation financed by non-owners = 0.6186

Converting this result to the percentage, we get

Proportion = 0.6186 * 100

Proportion of Kohl's Corporation financed by non-owners = 61.86%

or approximately 61.9%

On July 1, a company receives an invoice for $800 with the terms 1/10, net 30. On July 15, the payment should be $692 $790 $792 $800 $808

Answers

The payment to be received on July 15 should be equivalent to $800.

What are payments?

The amount received for the purpose served or promised to be served by a seller is known as a payment. Generally, discounts are offered for making early payments.

The discount offered for a period of 30 days cannot be redeemed for payment done within 15 days.

Thus, option D holds true that the payment of $800 shall be received on July 15.

Learn more about payments here:

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Final answer:

The terms 1/10, net 30, mean that the company is offered a 1% discount if they pay within 10 days. If they pay after this period, they have to pay the full amount. In this scenario, the payment on July 15 should be $800.

Explanation:

The invoice terms 1/10, net 30 mean that the company is offered a 1% discount if they pay the invoice within 10 days. After 10 days, the full invoice amount is due within 30 days. On July 1, the company receives an invoice for $800. If the company pays by July 10, they would only need to pay $792 ($800 - 1% of $800). If they wait until July 15, past the discount period, they will have to pay the full $800. Therefore the answer is $800.

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Coburn (beginning capital, $55,000) and Webb (beginning capital $95,000) are partners. During 2017, the partnership earned net income of $71,000, and Coburn made drawings of $17,000 while Webb made drawings of $25,000. Assume the partnership income-sharing agreement calls for income to be divided 30% to Coburn and 70% to Webb. Prepare the journal entry to record the allocation of net income.

Answers

Answer:

Given that,

Beginning capital of Coburn = $55,000

Beginning capital of Webb = $95,000

Partnership earned net income = $71,000

Coburn made drawings = $17,000

Webb made drawings = $25,000

Income-sharing ratio = 30:70

Coburn's share in profits = Net income earned × 30%

= $71,000 × 0.3

= $21,300

Webb's share in profits = Net income earned × 30%

= $71,000 × 0.7

= $49,700

Therefore, the journal entry is as follows:

Profit and loss A/c Dr. $71,000

To Coburn's capital A/c $21,300

To Webb's capital A/c $49,700

(To record the allocation of net income)

Project A has a predicted payback period of 2.5 and Project B has a predicted payback period of 5. Based on this information we can conclude that Select one: A. more information should be gathered before deciding on which project, if either, is desirable. B. Project A is preferred to Project B. C. Project B provides twice the return of Project A. D. Project B is preferred to Project A, but it is not necessarily twice as profitable.

Answers

Answer:

A. more information should be gathered before deciding on which project, if either, is desirable.

Explanation:

The lower Payback Period is not sufficient information to decide which project is more profitable. The payback period indicates when in the life of a project the initial investment principal cash flow is achieved.

But to decide about a certain project it is better to know the interest yield, it is also important to get the life of the project and other information.

For example:

a.- 250 investment 100 per year payback in 2.5-year life 3 years

b.- 500 investment 100 per year payback in 5-year life 20 years

While A payback occurs before project B is better

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