The employee is paid on a semi-monthly basis. a. If the change is made on the 9/15 payroll, what is the employee’s new semi-monthly salary? $2,708.33 (65,000/24) b. What are the employee’s retro wages on the 9/15 payroll?
During 2007 and 2008, Browser reported net income of $90,000 and $50,000 and paid dividends of $40,000 and $60,000, respectively. Fire wire reported a balance in its investment account of $230,000 on December 31, 2008. It uses the equity method in accounting for this investment. g. What is the annual amount of amortization of differential over the ten year period? h. In 2007, will Fire Wire report and increase or a decrease in the investment account balance?
The ex-dividend date is March 19 and there are 1 million shares outstanding. The payment date is set at March 31. Show all the necessary journal entries for this set of dividend transactions. (Points : 20) 5. The weight of common stock in a company is 50%, the weight of preferred stock is 10% and the weight of long-term debt is 40%.
FIN515 Week 4 Homework 9-1 Future Value of a Company Assume Evco, Inc., has a current price of $50 and will pay a $2 dividend in one year, and its equity cost of capital is 15%. What price must you expect it to sell for right after paying the dividend in one year in order to justify its current price? Answer: Find price of stock in 1 year. Current Price = $50, Dividend = $2, Cost of Equity Capital = 15% X = Price the stock will sell right after paying the dividend: 50 = (2+ X) /(1+0.15) X = 55.50 Therefore, price the stock will sell right after paying the one year dividend is $55.5 9-4 Dividend Yield and Cost of Equity Capital Krell Industries has a share price of $22 today. If Krell is expected to pay a dividend of $0.88 this year, and its stock price is expected to grow to $23.54 at the end of the year, what is Krell’s dividend yield and equity cost of capital?
Saheed Olagunju Homework Wk2 FI515 Chapter 3-1 Days Sales Outstanding Greene Sisters has a DSO of 20 days. The company’s average daily sales are $20,000. What is the level of its accounts receivable? Assume there are 365 days in a year. Answer AR= 20x20000=400,000 3-2 Debt Ratio Vigo Vacations has an equity multiplier of 2.5.
Ans – 9.47% 3. A 2 – year Treasury security currently earns 5.13%. Over the next 2 years, the real interest rate is expected to be 2.15% per year and the inflation premium is expected to be 1.75% per year. Calculate the maturity risk premium on the 2 year Treasury Security. Ans – 1.23% 4.
Timothy agrees to pay monthly instalments of R450. The agreement of the loan allows Timothy to start paying these equal monthly instalments from 1 August 2010. 7.2.1 Calculate the total amount owing to the financial institution on 1 July 2010. (2) 7.2.2 How many months will it take Timothy to pay back the loan? (4) 7.2.3 What is the balance of the loan immediately after Timothy has made the 25th payment?
If Casper decided to take out a loan that charges 20% APR over one year for the amount of £2000 over 12 months he would expect to pay £183 per month for 12 months with interest of £205. (candid money calculator accessed 28/7/11) If Casper makes the decision to use his credit card and he borrowed £2000 over 2 years at 15% APR his total monthly payments would be £96.08 per month, the interest would calculate to £306 this would be a total repayment of £2306 over 2 years. (candid money calculator accessed 28/7/11) Comparing the ‘loan’ to the credit card loan, Casper would pay his debt back quicker but at nearly double the price of the credit card loan, the advantage the credit card loan has, his monthly installments will be half of what the ‘loan’ but at 2 years rather than 1 year. Question 2 In question 2 of this essay I shall attempt to answer questions on expenditure and budgeting, giving a brief example from the study of the personal finance course book DB123 and the transcript of the dvd accessed on the Open University website.
Saheed Olagunju Homework Wk2 FI515 Chapter 3-1 Days Sales Outstanding Greene Sisters has a DSO of 20 days. The company’s average daily sales are $20,000. What is the level of its accounts receivable? Assume there are 365 days in a year. Answer AR= 20x20000=400,000 3-2 Debt Ratio Vigo Vacations has an equity multiplier of 2.5.
cost of equity =I used the 20 year at 5.74%+Geometric mean=5.9%x most recent beta .69=9.81% Cost of Debt I used Yield to maturity to find cost of debt From Exhibit 4 PV= 95.60 N=40 (20years x 2) since its paid semiannually Pmt=-3.375 (6.75/2) FV=-100 Comp I = 3.58% (semiannual) 7.16% (annual) After tax cost of debt = 7.16%(1-38%) = 4.44% E = market value of the firm's equity To find Market value of Equity you multiply share price by amount of shares $42.09x273.3= 11503. D = market value of the firm's debt I valued book value of debt at 1,291 Then divide 11503/(11503+1291)=89.9 so the weight for debt is 10.1 percent When I calculated WACC 4.44%x.101+9.81%x.899= 9.27% Cohen made a few mistakes when she calculated her WACC. First, she used historical data in