Explain the effect of issuance cost on firm value.

Q: What is the Capital Asset Pricing Model (CAPM)?What are the assumptions that underlie themodel?

A: The CAPM is an equilibrium model which stipulates the association among required rates of return and…

Q: What is market value ratio?

A: Ratio is the relation between two different quantities obtained after dividing one by another.

Q: Differentiate between price risk and reinvestment risk.

A: Price risk is the risk of decline of the price of the investment or an asset after the underlying…

Q: Under what conditions is a market-based transfer price most likely to be used?

A: Transfer Pricing: It is termed as the cost which is charged by the one department of the company…

Q: Define the term capitalized cost?

A: A Capitalized Cost is the cost incurred in the purchase and financing of fixed assets. It includes…

Q: Define the term internal rate of return?

A: The internal rate of return (IRR) is a capital budgeting metric used to gauge the benefit of…

Q: Describe the Market-Value Analysis?

A: Market Value is a solid indicator of investor or shareholder capital. All things considered, what…

Q: Explain how the lower of cost and net realizable value rule is applied to purchase commitments.

A: Purchase Commitments: It refers to the commitments or contract made by a company with its suppliers…

Q: What is the difference of Cost of Equity and the required rate of return on equities?

A: The amount of money that would be transferred to a company's shareholders if all of the company's…

Q: Define the term current market value.

A: The current market value (CMV) gives parties interested in making a transaction the approximate…

Q: 1-Jan-20 100,000.00 800,000.00 26.00 Shs Outstanding SHE, in pesos MP per sh Div per sh Cost of…

A: Market value added:  MVAs are depictions of the value produced by the management of a firm through…

Q: What is Market Value Added (MVA)?

A: The market value added is the difference of the current value of the company and the equity capital…

Q: What discount rate is used in a lessor’s NPV analysis?

A: Weighted average cost of capital is used as discount rate in Lessor's NPV analysis.

Q: Discuss the following models in relation to purchasing power parity.

A: Comparative rates of inflation in different countries are the factors influencing the exchange rate.…

Q: What is the quantitative disclosure of lessor?

A: Definition: Lease: Lease is a contractual agreement whereby the right to use an asset for a…

Q: Describe the advantages of the dollar-value LIFO method.

A: Definition:   Dollar value LIFO method: In this method, the valuation of inventory is calculated on…

Q: What is the accounting rate of return?

A:

Q: Explain the difference between return of investment versus return on investment.

A: The ratio analysis helps to analyze the financial statements of the business.

Q: Distinguish between par value and issue price.

A: Solution: Par value is a value assigned to a financial instrument issued by the company. It is…

Q: Define the term Profit margins?

A: Financial Ratios: Financial ratios are the metrics used to evaluate the liquidity, capabilities,…

Q: Define Seller Financing?

A: Seller financing : Seller financing is real estate agreement which means seller financing the real…

Q: Gain or Loss on Sale of FVPL 13) On January 1, 2020, Erika Company purchased equity investments held…

A: Investment held for trading is the investment held with the intent of selling within a limited…

Q: What is the formulae used to find markup price?

A: Markup price is the price that the player comes up with after adding the mark up to the cost price…

Q: Explain seller financing?

A: Seller financing is the term used in real estate deals when the buyer does not approach any…

Q: Define Financial leverage.

A: Leverage: Leverage measures overlook the mixture of debt and equity which is required for analyzing…

Q: What does it mean to pay to transfer a liability between market participants? What would be an e.g?…

A: Paying to transfer a liability between market participants essentially means that one party is…

Q: Define financial flexibility.

A: