Green Manufacturing, Inc., plans to announce that it will issue $2 million of perpetual debt and use the proceeds to repurchase common stock. The bonds will sell at par with a coupon rate of 6%. Green is currently an all-equity firm worth $6.3 million with 400,000 shares of common stock outstanding. After the sale of the bonds, Green will maintain the new capital structure indefinitely. Green currently generates annual pretax earnings of $1.5 million. This level of earnings is expected to remain constant in perpetuity. Green is subject to a corporate tax rate of 40%.
A) What is the expected return on Green?s equity before the announcement of the debt issue?
B) Construct Green's market value balance sheet before the announcement of the debt issue. What is the price per share of the firm's equity?
C) Construct Green's market value balance sheet immediately after the announcement of the debt issue. What is Green's stock price per share immediately after the repurchase announcement?
D) How many shares will Green purchase as a result of the debt issue? How many shares of common stock will remain after the repurchase?
E) Construct a market value balance sheet after the restructuring. What is the required return on Green's equity after the restructuring?

Answer: See explanation and attachment

Explanation:

a. Return on equity:

= Pre tax earnings × (1 - Tax rate) / Total equity

= 1.5 million × (1 - 40%) / 6.3 million

= 1.5 million × (1 - 0.4) / 6.3 million

= (1.5 million × 0.6) / 6.3 million

= 0.9 million / 6.3 million

= 14.29%

b. Check attachment for Green's market value balance sheet before the announcement of the debt issue.

The price per share of the firm's equity will be:

= Equity / Number of shares

= $6300000 / 400000

= $15.75 per share

c. Check Green's market value balance sheet immediately after the announcement of the debt issue.

Green's stock price per share immediately after the repurchase announcement will be calculated thus:

We need to know the value of tax shield which will be:

= 40% × $2,000,000

= $800,000

Value of firm = $6,300,000 + $800,000

= $7,100,000

Price per share will be:

= Equity / Number of shares

= 7100000 / 400000

= $17.75 per share

d. The number of shares that Green will purchase as a result of the debt issue will be:

= Debt issue / Price per share

= 2,000,000 / 17.57

= 112,676

The number of shares of common stock that will remain after the repurchase will be:

= 400000 - 112676

= 287324

e. Check attachment for market value balance sheet after the restructuring.

The required return on Green's equity after the restructuring will be:

= 14.29% + (2000000/5100000) × (14.29% - 6%) × (1 - 40%)

= 14.29% + 0.3921 × 8.29% × 0.6

= 14.29% + 1.95%

= 16.24%

The Smith family wants to relocate to a neighborhood with better schools before their three-year-old goes to kindergarten. They talked with Byron about properties he has for sale in neighborhoods they would like to live in. They also mentioned to Byron that they both work and may need someone to help with in-home care for their child. Byron gave them Taylor’s name to call about childcare. The Smiths also said they were having a hard time getting loan approval, so Byron suggested that they call Travis. Which best describes the jobs performed by Byron, Taylor, and Travis?

a) Byron is a Customer Service Representative, Taylor is a Child Care Worker, and Travis is a Loan Counselor.

b) Byron is a Real Estate Manager, Taylor is a Nanny, and Travis is a Loan Counselor.

c) Byron is a Real Estate Manager, Taylor is a Preschool Teacher, and Travis is a Customer Service Representative.

d) Byron is a Home Counselor, Taylor is a Nanny, and Travis is a Property Manager.

_______regulation applies to specific​ industries, whereas _______economic social regulation applies to businesses throughout the economy. Governments commonly regulate the prices and quality of services provided by​ electric, gas, and other​ utilities, which traditionally have been considered____technological oligopolistic geographic natural monopolies. Governments also single out various nonmonopolistic​ industries, such as the financial and transportation​ industries, for special forms of ______ economic social regulation. Among the common forms of ____ economic social regulation covering all industries are the​ occupational, health, and safety rules that federal and state governments impose on producers.

How to account for this $45,000? I think, this could be as Salary or dividend.
When Scott and Allison are in the store, they are the only ones who operate the register. Scott admits that, because he is in too much of a hurry, he sometimes puts the cash in his pocket rather than take the time to ring up the sale. Having cash in hand allows him to pay his babysitter and other personal expenses. Though it was difficult for him to be certain, Scott estimated that transactions worth about $45,000 each year have been handled in this way. Scott confirmed that he has not filed a personal tax return since he started GPP because he has not taken a salary.

Newberry, Inc., whose reporting currency is the U.S. dollar ($), has a subsidiary in Argentina, whose functional currency also is the $. The subsidiary acquires inventory on credit on November 1, 2017, for 230,000 pesos that is sold on January 17, 2018, for 267,000 pesos. The subsidiary pays for the inventory on January 31, 2018. Currency exchange rates are as follows:

November 1, 2017 $0.20
December 31, 2017 0.65
January 17, 2018 0.66
January 31, 2018 0.67

1. What amount does Newberry’s consolidated balance sheet report for this inventory at December 31, 2017?
a. $120,600.
b. $115,200.
c. $117,000.
d. $118,800.

2. What amount does Newberry’s consolidated income statement report for cost of goods sold for the year ending December 31, 2018?
a. $115,200.
b. $118,800.
c. $120,600.
d. $117,000.

advantages and disadvantages of proxemics​

Bluebird, Inc., does not provide its employees with any tax-exempt fringe benefits. The company is considering adopting a hospital and medical benefits insurance plan that will cost approximately $9,000 per employee. To adopt this plan, the company may have to reduce salaries and/or lower future salary increases. Bluebird is in the 25% (combined Federal and state rates) bracket. Bluebird also is responsible for matching the Social Security and Medicare taxes withheld on employees' salaries (at the full 7.65% rate). The hospital and medical benefits insurance plan will not be subject to the Social Security and Medicare taxes, and the company is not eligible for the small business credit for health insurance. The employees generally fall into two marginal tax rate (MTR) groups.

Income Tax Social Security and Medicare Tax Total
0.15 0.0765 0.2265
0.35 0.0145 0.3645

The company has asked you to assist in its financial planning for the hospital and medical benefits insurance plan by computing the following:

Required:
a. How much taxable compensation is the equivalent of $9,000 of exempt compensation for each of the two classes of employees?
b. What is the company’s after-tax cost of the taxable compensation computed in part (a)?
c. What is the company’s after-tax cost of the exempt compensation?
d. Briefly explain your conclusions from the preceding analysis.

A company is considering replacing an old piece of machinery, which cost $597,600 and has $351,400 of accumulated depreciation to date, with a new machine that has a purchase price of $483,600. The old machine could be sold for $64,900. The annual variable production costs associated with the old machine are estimated to be $157,400 per year for eight years. The annual variable production costs for the new machine are estimated to be $99,300 per year for eight years.

Required:
a. Prepare a differential analysis dated April 29 to determine whether to continue with (Alternative 1) or replace (Alternative 2) the old machine.
b. What is the sunk cost in this situation?

Suppose the world price is​ $20. a. Is this country an exporter or an​ importer? A. exporter B. importer b. How many units of the good are​ exported/imported? nothing units c. Fill in the chart below. If your answer is​ negative, put a minus sign in front of the number. Area Before Trade Value After Trade Value Change Value Consumer Surplus ​$ nothing ​$ nothing ​$ nothing Producer Surplus ​$ nothing ​$ nothing ​$ nothing Total Welfare ​$ nothing ​$ nothing ​$ nothing d. Who gains when the country allows free international​ trade? A. consumers and the government B. consumers C. no one gains D. consumers and producers E. ​consumers, producers, and the government F. producers G. producers and the government H. the government Who loses from free trade in this​ case? A. the government B. no one gains C. consumers and the government D. producers E. consumers F. ​consumers, producers, and the government G. producers and the government H. consumers and producers ​Overall, is there a net gain or a net loss when the country moves from No Trade to Free​ Trade? A. net gain B. net loss What is the overall value of the gain or​ loss? ​$ nothing ​(if your answer is​ negative, put a minus sign before your​ answer).

Bismith Company reported: Actual fixed overhead Fixed manufacturing overhead spending variance Fixed manufacturing production-volume variance $700,000 $40,000 unfavorable $30,000 unfavorable
To record the write-off of these variances at the end of the accounting period, Bismith would
A. credit Fixed Manufacturing Production-Volume Variance for $30,000
B. debit Fixed Manufacturing Control for $700,000
C. credit Fixed Manufacturing Overhead Allocated for $700,000
D. debit Fixed Manufacturing Overhead Spending Variance for $40,000

Hubert lives in San Diego and runs a business that sells boats. In an average year, he receives $851,000 from selling boats. Of this sales revenue, he must pay the manufacturer a wholesale cost of $476,000; he also pays wages and utility bills totaling $281,000. He owns his showroom; if he chooses to rent it out, he will receive $71,000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Hubert does not operate this boat business, he can work as an accountant, receive an annual salary of $34,000 with no additional monetary costs, and rent out his showroom at the $71,000 per year rate. No other costs are incurred in running this boat business.

Identify each of Bob's costs in the following table as either an implicit cost or an explicit cost of selling boats.

a. The salary Bob could earn if he worked as an accountant
b. The wholesale cost for the boats that Bob pays the manufacturer
c. The rental income Bob could receive if he chose to rent out his showroom
d. The wages and utility bills that Bob pays

In the open economy macroeconomic model, the amount of dollars demanded in the market for foreign-currency exchange at a given real exchange rate increases if a. either U.S. imports or exports increase. b. either U.S. imports or exports decrease. c. either U.S. imports increase or U.S. exports decrease. d. either U.S. imports decrease or U.S. exports increase.

____ is the measure of how much money you can make off each sale.

Tamarisk Corporation had the following activities in 2020. 1. Payment of accounts payable $711,000 4. Collection of note receivable $93,000 2. Issuance of common stock $247,000 5. Issuance of bonds payable $522,000 3. Payment of dividends $335,000 6. Purchase of treasury stock $49,000 Compute the amount Tamarisk should report as net cash provided (used) by financing activities in its 2020 statement of cash flows. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) Net cash select an option by financing activities $enter a dollar amount

Multiple Choice Question 47 Tidwell Industries has the following overhead costs and cost drivers. Direct labor hours are estimated at 100000 for the year. Activity Cost Pool Cost Driver Est. Overhead Cost Driver Activity Ordering and Receiving Orders $ 105000 500 orders Machine Setup Setups 283500 450 setups Machining Machine hours 1462500 125000 MH Assembly Parts 1170000 1000000 parts Inspection Inspections 285000 500 inspections If overhead is applied using traditional costing based on direct labor hours, the overhead application rate is

In the balance sheet at the end of its first year of operations, Dinty Inc. reported an allowance for uncollectible accounts of $82,000. During the year, Dinty wrote off $32,000 of accounts receivable it had attempted to collect and failed. Credit sales for the year were $2,200,000, and cash collections from credit customers totaled $1,950,000. What accounts receivable balance would Dinty report in its first year-end balance sheet?

WellWheats, Inc. produces breakfast cereal and sells each box, or unit, for $7. The company is projecting sales of 1,000 units for the month of March. There are 30 units in the beginning inventory. Each unit requires 20 ounces of raw materials and 0.20 direct labor hours to make. The company's policy is to keep ending finished goods inventory of 10% of the current month's sales. Selling and administrative expenses for the month have been budgeted at $2,000. If the direct labor cost per hour is $0.75, calculate the budgeted direct labor cost for the month of March.
A. $214.00
B. $160.50
C. $802.50
D. $236.00

Following is information on two alternative investments being considered by Jolee Company. The company requires a 6% return from its investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1). (Use appropriate factor(s) from the tables provided.)
Project A Project B
Initial investment $ (174,325 ) $ (152,960 )
Expected net cash flows in year:
1 41,000 44,000
2 60,000 53,000
3 72,295 68,000
4 87,400 81,000
5 59,000 30,000
For each alternative project compute the net present value.
Project A
Initial Investment $174,325
Chart values are based on:
i =
Year Cash inflow x Table factor = Present Value
1 =
2 =
3 =
4 =
5 =
Project B
Initial Investment $152,960
Year Cash inflow x Table factor = Present Value
1 =
2 =
3 =
4 =
5 =
For each alternative project compute the profitability index.
Choose Numerator: / Choose Denominator: = Profitability index
/ = Profitability index
Project A
Project B
2. Assume If the company can only select one project, which should it choose?
Project A or Project B

Waterways has a sales mix of sprinklers, valves, and controllers as follows.
Annual expected sales:
Sale of sprinklers 460,000 units at $26.50
Sale of valves 1,480,000 units at $11.20
Sale of controllers 60,000 units at $42.50
Variable manufacturing cost per unit
Sprinklers $13.96
Valves $7.95
Controllers $29.75
Fixed manufacturing overhead cost (total) $760,000
Variable selling and administrative expenses per unit:
Sprinklers $1.30
Valves $0.50
Controllers $3.41
Fixed selling and administrative expenses (total) $1,600,000
A) Determine the sales mix based on unit sales for each product.
B) Using the annual expected sales for these products, determine the weighted-average unit contribution margin for these three products.
C) Assuming the sales mix remains the same, what is the break-even point in units for these products?

Lifecycle Motorcycle Company is expected to pay a dividend in year 1 of $2, a dividend in year 2 of $3, and a dividend in year 3 of $4. After year 3, dividends are expected to grow at the rate of 7% per year. An appropriate required return for the stock is 12% (for both stages). Using the multistage DDM, the stock should be worth __________ today. Group of answer choices

On January 1, Mitzu Co. pays a lump-sum amount of $2,750,000 for land, Building 1, Building 2, and Land Improvements 1. Building 1 has no value and will be demolished. Building 2 will be an office and is appraised at $671,000, with a useful life of 20 years and a $75,000 salvage value. Land Improvements 1 is valued at $579,500 and is expected to last another 19 years with no salvage value. The land is valued at $1,799,500. The company also incurs the following additional costs.
Cost to demolish Building 1 $345,000
Cost of additional land grading 195,000
Cost to construct new building (Building 3), having a useful life of 25 years and a $402,000 salvage value 2,242,000
Cost of new land improvement (Land Improvements 2) near Building 2 having a 20-year useful life and no salvage value 173,000
Allocate the costs incurred by Mitzu to the appropriate columns and total each column.
Allocation of Purchase Price Appraised Value Percent of Total x Total Cost of Acquisition = Apportioned Cost
Land $1,952,000 x $2,750,000 =
Building 2 $732,000 x $2,750,000 =
Land Improvements 1 $366,000 12% x $2,750,000 = 330,000
Totals $1,952,000 12% x = 330,000

Explain why the following scenario fails to meet the definition of a staff position.
Situation: Carmen helps manufacture auto parts for a company that supplies a manufacturer. She is talking to her operations manager.
Carmen: "I created several designs and have chosen the best one. Here is a prototype. I can make as many as needed."

Hinck Corporation reported net cash provided by operating activities of $361,200, net cash used by investing activities of $150,800 (including cash spent for capital assets of $206,000), and net cash provided by financing activities of $78,900. Dividends of $126,900 were paid.

Chesapeake Inc. acquired a registered trademark for $600,000. The trademark has a remaining legal life of 5 years but can be renewed every 10 years for a nominal fee. Chesapeake does not expect to renew the acquired trademark when the legal life is over. What amount of amortization expense should Chesapeake record for the trademark in the current year?
a. $0
b. $15,000
c. $40,000
d. $120,000

At the beginning of 2021, Terra Lumber Company purchased a timber tract from Boise Cantor for $3,510,000. After the timber is cleared, the land will have a residual value of $720,000. Roads to enable logging operations were constructed and completed on March 30, 2021. The cost of the roads, which have no residual value and no alternative use after the tract is cleared, was $279,000. During 2021, Terra logged 620,000 of the estimated 6.2 million board feet of timber.Required:Calculate the 2021 depletion of the timber tract and depreciation of the logging roads assuming the units-of-production method is used for both assets. (Do not round intermediate calculations. Enter values in whole dollars.)

Bonita Company has a factory machine with a book value of $87,800 and a remaining useful life of 5 years. It can be sold for $32,000. A new machine is available at a cost of $455,100. This machine will have a 5-year useful life with no salvage value. The new machine will lower annual variable manufacturing costs from $624,400 to $524,400. Prepare an analysis showing whether the old machine should be retained or replaced.

The demand function is given by
D = 20 - p-p2 where D =
demand and p = price. Find the
elasticity of demand w.r.t. price
when price is 2​

How do you do this journal entry for accounting?
- Now record the estimated cost of the returns. Estimated sales returns of $1,040, with cost of $333.

Other things equal, an appreciation of the U.S. dollar would Multiple Choice increase productivity and increase aggregate supply. decrease net exports and decrease aggregate demand. increase the prices of imported resources and decrease aggregate supply. decrease the supply of money and decrease aggregate demand.

Robb Industries Inc. (RII) developed standard costs for direct material and direct labor. In 20X4, RII estimated the following standard costs for one of their major products, the 10-gallon plastic container.
Budgeted quantity Budgeted price
Direct materials 0.10 pounds $30 per pound
Direct labor 0.05 hours $15 per hour
During June RII produced and sold 5,000 containers using 490 pounds of direct materials at an average cost per pound of $32 and 250 direct manufacturing labor-hours at an average wage of $15.25 per hour.
a. What is June’s direct material price variance?
standard price 30 acutal quantity 490
actual price 32 direct material 980 unfavorable
b. What is June’s direct material efficiency variance?
standard price 30 actual quantity 490
standard quality 500 direct material 300 favorable
c. What is June’s direct labor rate variance?
standard rate 15 actual hours 450
actual rate 15.25 manufactoring labor variance 62.50 unfavorable
d. What is June’s direct labor efficiency variance?
standard hours 250 standard rate 15
actual hours 250 maunfaturing varience 0

how can technological innovation help a company become globalised​