Reference no: EM131881464
Question: 1. Define at least two common credit agreement provisions (loan covenants).
2. Classify the following as long term or current liabilities: Accounts Payable, Accrued Liabilities, Note Payable with total balance due in 5 years, Mortgage Loan with payments made monthly over 5 years.
3. What are the three components of the cost of capital?
4. Calculate the after tax cost of debt using the following information (hint: see page 285 in text).
- A company issues $2 million at 9% interest with a 15% tax rate.
- What is the after-tax cost of debt?
- Calculate the cost of issuing preferred stock using the same information above.
- What is the preferred stock interest cost?
- Using the information above, what are the advantages and disadvantages of both methods?
5. What are some reasons a company would chose not to offer cash dividends? What impact might this have on the business operations?
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Prepare journal entry to record the accrual of interest
: Prepare journal entry to record the accrual of interest on December 31. Prepare journal entry to record the payment of Interest on January 1.
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Discuss disadvantages of using a standard cost system
: Compare the relative merits of usage standards based on: · The company's normal, expected conditions and experience, versus · Product engineers' technical.
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What is the project npv
: The firm's tax bracket is 35 percent, and the required return on the project is 12 percent. What is the project NPV?
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What amount is attributed to goodwill on date of acquisition
: Wasatch Corporation buys 70 percent of this common stock for $1,680,000 and 60 percent of preferred stock for $660,000. What amount is attributed to goodwill
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What is the preferred stock interest cost
: Classify the following as long term or current liabilities: Accounts Payable, Accrued Liabilities, Note Payable with total balance due in 5 years.
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Compute webbs debt ratio and interest-bearing debt ratio
: If you were a bank loan officer who was analyzing whether or not to loan more money to? Webb, which of the ratios calculated in parts a.
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Best case and worst case performance benchmarks
: Compute the best case and worst case performance benchmarks for the old and the new line.
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What amount of consolidated goodwill would be recognized
: On January 1, Coldwater Company has a net book value of $1,792,000. What amount of consolidated goodwill would be recognized from this acquisition?
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How much money can withdraw each year
: Upon retirement, the initial investment and 401k fund will be combined and used for living expenses. Excess funds will remain invested during retirement.
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