Equity capital (20 million shares, Kshs.10 par) Kshs. 200 million Preference capital, 12 percent (500,000 shares, Rs.100 par) Kshs. 50 million Retained earnings Kshs. 350 million Debentures 14 percent (1,200,000 debentures, Rs.100 par) Rs. 120 million Term loans, 13 percent Kshs. 80 million ………………… Kshs.800 million ………………… The next expected dividend per share is Kshs.2.00. The dividend per share is expected to grow at the rate of 12 percent. The market price per share is Kshs. 50.00. Preference stock, redeemable after 10 years, is currently selling for Kshs.85.00 per share. Debentures, redeemable after 5 year, are selling for Kshs.90.00 per debenture. The tax rate for the company is 30 percent. Required: Calculate the average cost of capital.

Yang corporation starts a foreign subsidiary on january 1 by investing 20,000 rand. yang owns all of the shares of the subsidiary’s common stock. the foreign subsidiary generates 40,000 rand of net income throughout the year and pays no dividends. the rand is the foreign subsidiary’s functional currency. currency exchange rates for 1 rand are as follows: lo 10-3 january $0.25 = 1 rand average for the 0.28 = 1 december 0.31 = 1 in preparing consolidated financial statements, what translation adjustment will yang report at the end of the current year? a. $400 positive (credit). b. $1,000 positive (credit). c. $1,400 positive (credit). d. $2,400 positive (credit). hoyle, joe ben; hoyle, joe ben. advanced accounting (page 513). mcgraw-hill higher education. kindle edition.