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sandyykn6031
25.11.2020 •
Business
Butcher Timber Company hired your consulting firm to help them estimate the cost of equity. The yield on the firm's bonds is 8.75%, 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?
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Ответ:
12.60%
Explanation:
Calculation for the estimate of the firm's cost of equity from retained earnings
Using this formula
Estimate Firm's cost of equity =Risk premium + Cost of debt
Let plug in the formula
Estimate Firm's cost of equity=3.85% + 8.75%
Estimate Firm's cost of equity= 12.60%
Therefore the estimate of the firm's cost of equity from retained earnings will be 12.60%
Ответ:
d. $240,400
Explanation:
To calculate the Cost of Goods sold for the year we simply add the Opening Balance of Finished goods to the Cost of Goods for the year and then subtract the Finished goods balance at year end (ending).
That would be,
= 233,000 + 31,600 - 24,200
= $240,400
$240,400 is the Cost of Goods sold for the year so Option D is correct.