Pearson Motors has a target capital structure of 30% debt and 70% common equity, with no preferred stock. The yield to maturity on the company's outstanding bonds is 11%, and its tax rate is 40%. Pearson's CFO estimates that the company's WACC is 12.40%. What is Pearson's cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places. %

Q: Define special purpose entity (SPE)

A: A special purpose entity is a legally separate enterprise that bears liability to an organization.…

Q: Draw ALL products of the following NH + H2O -->

A: Approach to solving the question: Detailed explanation: Examples: Key references:

Q: Which of the following orders allows for partial execution?

A: FOK (Fill or Kill Order): This type of order allows being executed immediately at the specified…

Q: please explain 120/360

A: Solution: Interest amount is computed using formula = Principal * Interest rate * time Where time is…

Q: P12.2 (c)

A: Ending Retained Earnings  = Beginning Retained Earnings  + Net income - dividend declared…

Q: can you also explain what part is a. b. and c. please

A: A budget is an estimate of amount which is prepared by the management for various planning and…

Q: THE SMITH COMPANY Using the business transactions below, complete T-accounts for the Smith Company.…

A: T Accounts    1. Cash Account Particular Debit Particular Credit         To capital A/c…

Q: In which document would you find the MD&A? O A. Form 8-K O B. Form 10-K O C. Both A and B O D.…

A: Paid-in Capital Paid-in capital is that the total quantity cash equivalents contributed to a company…

Q: 8. If money is worth (.06, m = 4), find the present value of a perpetuity $1000, paid semi-annually,…

A: Present value of perpetuity is the value of an asset whose cash flow is received forever.

Q: Please answer sections d), e) and f)

A: Debt Management Ratios are financial metrics that provide insights into a company's ability to…

Q: the difference between a W-4 form and W-2 form.

A: Form W-4: Employee’s withholding allowance certificate. This form is filled by employees for their…

Q: Explanation 1031 like-kind exchange

A:

Q: What would the entry be for the letter H.?

A:

Q: the differencwe between the new IFRS 15 and old IFRS 15

A: The acronym IFRS stands for International Financial Reporting Standards that provide the rules,…

Q: Can you please show how to solve question 4, 5, 6a, 6b.

A: Capital budgeting is a financial management process used by organizations to evaluate and make…

Q: Carefully explain the cross-sectional test of the CAPM.

A: The Capital Asset Pricing Model (CAPM) is a mathematical model that describes the relationship…

Q: Define registration statement (S-1)

A: For public organizations situated in the US, SEC Form S-1 is the underlying enrollment structure for…

Q: What is AAA (Section 1368(e))

A: The S corporation is a corporation that chooses to pass all income, losses, deductions, and all…

Q: What is GAAP in Full

A: GAAP is a combination of set of different policy standards

Q: The answer is somewhat close. The right answer is 1.5337 Please clarify

A: Stock price is $50 Strike price is $52 Risk free rate is 1% Time period is 3 months To Find: Value…

Q: E14.3 (b)

A: The cash flow statement is helpful for the stakeholders as they can identify the organization's…

Q: Could you answer question 4-7? Please

A: The total value of the goods still in stock in a company's inventory at the end of an accounting…

Q: Provide in full the meaning of these abbreviations and tell briefly how they interface with the…

A: A structured mechanism for gathering data, translating the data into relevant information and…

Q: 16. In an Excel worksheet, what would result in cell C5 from -NOT(C4-10) if cell C4-11? A. 10 B. 11…

A: =NOT(Cell reference=condition) function changes FALSE to TRUE , or TRUE to FALSE

Q: Please answer 4a above

A: Introduction:- Return on investment is calculated by dividing the net income on an investment by the…

Q: x8=h 0817×1= h

A: y= 4x + 180 y= 8x   To solve above equations to find the value of x and y

Q: explain in details the scope, obectives

A: IAS / IFRS 33 deals with the calculation and presentation of earnings per share (EPS). It applies to…

Q: rom where does 184.17 came in step 3

A: When a loan is taken then periodic payments has to be made. In this case and situation monthly…

Q: please help me with part E.

A: A question with multiple sub parts were asked by you earlier. One of the sub parts were not…

Q: The first amount was inccorect

A: Solution:- When equal amount is paid each period at end of period, it is called ordinary annuity.…

Q: Section 1250 summary

A: Section 1250 of the United States Internal Revenue Code is a rule wherein IRS will tax a gain from…

Q: Over subscription and under subscription

A: Over subscription and under subscription are terms associated with the issue of shares of a company…

Q: Explain four (4) factors that should be considered in using CAATs.

A: CAATs means Computer Assisted Auditing Techniques. These are the aided techniques in which task of…

Q: 4. What is sensitivity analysis?

A: What Is Sensitivity Analysis?

Q: subject:accunting information system. Q5: DFD SYMBOLS AND DESIGN CONSIDERATIONS explain each symbol…

A: DFD: It is the data flow diagram which uses four types of symbols to flow the information into…

Q: When I type in that calculation is comes out as "0"   =PMT(B2/12,B3*12,-B1)

A: PMT function is a financial function of excel. It is used to compute the periodic payment amount.…

Q: it say 1.33 is incorrect

A:

Q: Why is a policy statement important?

A: A policy statement or an investment policy statement is a document created by the investment…

Q: Please provide answer to questions a to c

A: Introduction: Shareholders equity represents owners' equity i.e. amount of claim for the…

Q: Where does 4.0312, 2.9931, and 3.5431 came from? Can you explain?

A: 4.0312,2.9931 and 3.5431 are PV of annuity factors. To determine the equivalent annual saving(EAS,…

Q: Question 3.  Define what is Riba & describe two types of Riba with example for each

A: In Islam Riba is a term used to refer excess, increase, or addition to the price in case of lending,…

Q: Please answer section d) only

A: Degree of combined leverage (DCL) It is a leverage ratio that includes the combined effects, caused…

Q: 3) What are the functions of FASB, GASB and FASAB? Explain

A: Accounting rules are used for the high quality of financial information.

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.