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- Question 7 tab The Federal Funds Rate is O the rate charged on U.S. Treasury bonds by the Federal Reserve O the rate charged on corporate bank loans to healthy "prime" borrowers the rate charged on overnight loans between banks the rate charged on U.S securities with maturities of less than a year Onone of the above esc ctrl shift T caps lock A Moving to another question will save this response. Type here to search f1 00? It →1 1 fn f2 * 2 A f3 N # 3 W E f4 S x alt LA 4 D f5 AD % R C 5 f6 10 T V 6 S hp f7 & B10 8 of 25 All Question # 8 A Report a Problem &Revisit Choose the best option Generally, a firm's estimated component cost of debt O accurately estimates the firm's true opportunity cost of debt O equals the firm's weighted cost of capital O underestimates the firm's true opportunity cost of debt O overestimates the firm's true opportunity cost of debt +91 80 4719 0917 = Deepanshu | Support +1 650-924-9221 metti• P Type here to searchQ 23.21: Last year, Alpha Corporation spent $250,000 to repurchase 15,000 shares of its own outstanding common stock. The company also paid $40,000 in interest on a construction loan that it had obtained from its bank. How should these transactions be reflected on Alpha’s annual statement of cash flows, and why? A : The two transactions should be reported in separate sections of the statement because one involves long-term assets while the other involves long-term liability. Specifically, Alpha should record a $250,000 cash outflow in the investing section and a $40,000 cash outflow in the financing section. B : The two transactions should be reported in separate sections of the statement because one involves a change in equity while the other involves a change in income. Specifically, Alpha should record a $250,000 cash outflow in the financing section and a $40,000 cash outflow in the operating section. C : Both transactions should be reported in the…
- 35- Check if the cash flows A and B, in the following table, are equivalent for a rate of 2% p.m., under compound interest.The adjusted trial balance of Friendships Co. as of December 31, 20x1 is shown below: Debits Credits Cash on hand Cash in bank - BPI (Savings) Cash in bank - BPI (Current) Cash in bank - BDO (Current) 62,350 1,720,500 1,890,234 567,891 Accounts receivable 8,341,689 Allowance for doubtful accounts 347,182 Advances to employees Loans receivable (due in 20x4) 57,610 9,827,341 Unearned interest income 1,234,819 Raw materials inventory Work in process inventory Finished goods inventory Prepaid income tax Prepaid supplies Advances to suppliers Held for trading securities Investment in equity securities - FVOCI 1,237,398 7,987,908 12,892,309 234,125 890,239 34,981 2,834,079 987,234 1,290,347 946,013 8,980,751 3,419,877 Investment in associate Interest receivable (due on Mar. 1, 20x2) Land Building Accumulated depreciation - Bldg. Equipment Accumulated depreciation - Equipt. Accounts payable Accrued liabilities Income tax payable 712,930 917,387 234,125 9,071,239 889,712 721,346 Deferred tax…Item 4 of 25 The Chief Finance Officer of Kulit Company follows the policy of matching the maturity of assets with the maturity of financing. The implications of this policy include all of the following except Select the correct response: the seasonal expansion of cash, receivable and inventory should be financed by short-term debt. O long-term assets like plant and equipment should be financed with long-term debt or equity. O cash, receivable and inventory should be financed with long-term debt or equity the minimum level of cash, receivable and inventory required to stay in business can be considered permanent and financed with long-term debt or equity
- 33c 15 at 10:20pm nstructions Question 27 A. Butcher Timber Company hired your consulting firm to help them estimate the cost of equity. The yield on the firm's bonds is 6.75%, and your firm's economists believe that the cost of equity can be estimated using a risk premium of 3.85% over a firm's own cost of debt. What is an estimate of the firm's cost of equity from retained earnings? O 10.60% O 12.40% O 11.34% 9.96% O 12.30% • Previous Next Not saved Submit Quiz SC 80 こニ。 F1 F2 F3 F4 F5 F6 F7 F8 FO F10 % & 2 3 4 5 6 7 8 W R S D E G M I %24Module 6 Question 2 (Individual or component costs of capital) Compute the cost of capital for the firm for the following: a. Currently bonds with a similar credit rating and maturity as the firm's outstanding debt are selling to yield 8.00 percent while the borrowing firm's corporate tax rate is 34 percent. b. Common stock for a firm that paid a $1.05 dividend last year. The dividends are expected to grow at a rate of 5.0 percent per year into the foreseeable future. The price of this stock is now $25.00. c. A bond that has a $1,000 par value and a coupon interest rate of 12.0 percent with interest paid semiannually. A new issue would sell for $1,150 per bond and mature in 20 years. The firm's tax rate is 34 percent. d. A preferred stock paying a dividend of 7.0 percent on a $100 par value. If a new issue is offered, the shares would sell for $85.00 per share. a. The after-tax cost of debt debt for the firm is ________%.
- QUESTION 20 First National Bank Assets Liabilities and Owners' Equity Reserves $1,800 Deposits $16,000 Loans $9,000 Debt $1000 Short-term securities $7,000 Capital (owners' equity) $800 If the market value of Short-term securities fall to $6,800. Then the percentage change of the leverage ratio is: a. 31.83% b. 29.33% C. -29.33% d. -31.83% e. 200$ f.-200$ g. There is not enough information to find the answer a e f OOO OProblem 11-15 (Algo) Review problem-understanding liquidity measures LO 11-1 Assume that the current ratio for Arch Company is 3.0, its acid-test ratio is 1.5, and its working capital is $360,000. Answer each of the following questions independently, always referring to the original information. Required: a. How much does the firm have in current liabilities? Note: Do not round intermediate calculations. b. If the only current assets shown on the balance sheet for Arch Company are Cash, Accounts Receivable, and Merchandise Inventory, how much does the firm have in Merchandise Inventory? Note: Do not round intermediate calculations. c. If the firm collects an account receivable of $118,000, what will its new current ratio and working capital be? Note: Round "Current ratio" to 1 decimal place. d. If the firm pays an account payable of $57,000, what will its new current ratio and working capital be? Note: Do not round intermediate calculations. Round "Current ratio" to 1 decimal place. e.…Question 8 Assume that the following banks have the same net amount of 2 million, but they are different due to the capital structure: Bank Alpha Reserves 12 million Deposits 85 million Loans 90 million Bank Capital 17 million TOTAL Assets 102 million TOTAL Liabilities and Equity 102 million Bank Beta Reserves 12 million Deposits 100 million Loans 90 million Bank Capital 2 million TOTAL Assets 102 million TOTAL Liabilities and Equity 102 million Which Bank is more attractive for shareholders? [Hints: Calculate the ROE]