Business, 06.04.2020 18:58 mobslayer88
Adams Corporation's present capital structure, which is also its target capital structure is
40% debt and 60% common equity. Next year's net income after tax is projected to be
$21,000, and Adams' payout ratio is 30%. The company's earnings and dividends are
growing at a constant rate of 5%; the last dividend (D0) was $2.00; and the current
equilibrium stock price is $21.88. Adams can raise up to $20,000 of debt at a 12% before-
tax cost. All debt after $20,000 will cost 16%. If Adams issues new common stock, a 20%
flotation cost will be incurred. The firm's marginal tax rate is 34%.
a/ What is the maximum amount of new capital that can be raised at the LOWEST
component cost of EQUITY?
b/ What is the component cost of equity by selling new common stock?
thanks
Answers: 3
Business, 21.06.2019 21:00
Colah company purchased $1.8 million of jackson, inc. 8% bonds at par on july 1, 2018, with interest paid semi-annually. when the bonds were acquired colah decided to elect the fair value option for accounting for its investment. at december 31, 2018, the jackson bonds had a fair value of $2.08 million. colah sold the jackson bonds on july 1, 2019 for $1,620,000. the purchase of the jackson bonds on july 1. interest revenue for the last half of 2018. any year-end 2018 adjusting entries. interest revenue for the first half of 2019. any entry or entries necessary upon sale of the jackson bonds on july 1, 2019. required: 1. prepare colah's journal entries for above transaction.
Answers: 1
Business, 22.06.2019 00:30
How did lani lazzari show her investors she was a good investment? (site 1)
Answers: 3
Business, 22.06.2019 12:30
On june 1, 2017, blossom company was started with an initial investment in the company of $22,360 cash. here are the assets, liabilities, and common stock of the company at june 30, 2017, and the revenues and expenses for the month of june, its first month of operations: cash $4,960 notes payable $12,720 accounts receivable 4,340 accounts payable 840 service revenue 7,860 supplies expense 1,100 supplies 2,300 maintenance and repairs expense 700 advertising expense 400 utilities expense 200 equipment 26,360 salaries and wages expense 1,760 common stock 22,360 in june, the company issued no additional stock but paid dividends of $1,660. prepare an income statement for the month of june.
Answers: 3
Business, 22.06.2019 17:50
The management of a supermarket wants to adopt a new promotional policy of giving a free gift to every customer who spends > a certain amount per visit at this supermarket. the expectation of the management is that after this promotional policy is advertised, the expenditures for all customers at this supermarket will be normally distributed with a mean of $95 and a standard deviation of $20. if the management wants to give free gifts to at most 10% of the customers, what should the amount be above which a customer would receive a free gift?
Answers: 1
Adams Corporation's present capital structure, which is also its target capital structure is
...
...
Mathematics, 04.03.2021 19:50
Mathematics, 04.03.2021 19:50
Spanish, 04.03.2021 19:50
Spanish, 04.03.2021 19:50
English, 04.03.2021 19:50
Mathematics, 04.03.2021 19:50
Mathematics, 04.03.2021 19:50
Mathematics, 04.03.2021 19:50
Physics, 04.03.2021 19:50