Each of the following decreases total stockholders' equity except a stock dividend, cash dividend. O all of these decrease total stockholders' equity. O liquidating dividend.
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- X Your answer is incorrect. The effect of a stock dividend is to O change the composition of stockholders' equity. O decrease total assets and stockholders' equity. O increase the book value per share of common stock. O decrease total assets and total liabilities. eTextbook and Media Assistance Us Save for Later Attempts: 1 of 2 used Submit Answ @ %23 %24 8 4. u e d n m CQuestion # 13 A Report a Problem Revisit Choose the best op Cost of servicing an equity does not include O interest O issue of bonus s O cash dividend O script dividend +91 80 4719 0917 Deepanshu | Support+1 650-924-9221 mexl 2 Type here to searchHi there, could you please check if my answers were correct? Testbank Exercise 136 Indicate the effect of each of the following transactions on total stockholders' equity by placing an "X" in the appropriate column. Increase Decrease No Effect 1. Treasury stock is resold at more than cost. X 2. Operating loss for the period. X 3. Retirement of bonds payable at more than book value. X 4. Declaration of a stock dividend. x 5. Acquisition of machinery for common stock. X 6. Conversion of bonds payable into common stock. X 7. Not declaring a dividend on cumulative preferred stock. x 8. Declaration of cash dividend. X 9. Payment of cash dividend. X
- tol Processing ng Help Save & Exit Submit Saved Practice Problems i Check my work Eaton Electronic Company's treasurer uses both the capital asset pricing model and the dividend valuation model to compute the cost of common equity (also referred to as the required rate of return for common equity). Assume: Rf = 7% Km 10% = 1.6 D1 = $ 0.70 $ 19 8% %3D PO = nt a. Compute Ki (required rate of return on common equity based on the capital asset pricing model). (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) ences Ki b. Compute Ke (required rate of return on common equity based on the dividend valuation model). (Do not round intermediate calculations, Input vour answer as a percent rounded to 2 decimal places.) < Prev 10 of 10 Next Mc Graw Hill 149 MacBook AirUSING PAST INFORMATION TO ESTIMATE REQUIRED RETURNS Use online resources to work on this chapters questions. Please note that website information changes over time, and these changes may limit your ability to answer some of these questions. Chapter 8 discussed the basic trade-off between risk and return. In the capital asset pricing model (CAPM) discussion, beta was identified as the correct measure of risk for diversified shareholders. Recall that beta measures the extent to which the returns of a given stock move with the stock market. When using the CAPM to estimate required returns, we would like to know how the stock will move with the market in the future, but because we dont have a crystal ball, we generally use historical data to estimate this relationship with beta. As mentioned in Web Appendix 8A, beta can be estimated by regressing the individual stocks returns against the returns of the overall market. As an alternative to running our own regressions, we can rely on reported betas from a variety of sources. These published sources make it easy for us to readily obtain beta estimates for most large publicly traded corporations. However, a word of caution is in order. Beta estimates can often be quite sensitive to the time period in which the data are estimated, the market index used, and the frequency of the data used. Therefore, it is not uncommon to find a wide range of beta estimates among the various Internet websites. On the summary screen, you should see an interactive chart. Typically, you can chart performance over the last 24 hours, 1 month, 6 monthsup to 5 years, or even longer. Select different time periods and watch how the graph changes. On this screen you should also see a menu to select historical prices (historical data). Some websites will not only show daily activity but also weekly or monthly activity In addition, some websites will allow you to download the data into an Excel spreadsheet.CALCULATING 3MS COST OF CAPITAL Use online resources to work on this chapters questions. Please note that website information changes over time, and these changes may limit your ability to answer some of these questions. In this chapter, we described how to estimate a companys WACC, which is the weighted average of its costs of debt, preferred stock/ and common equity. Most of the data we need to do this can be found from various data sources on the Internet. Here we walk through the steps used to calculate Minnesota Mining Manufacturings () WACC DISCUSSION QUESTIONS 1. As a first step, we need to estimate what percentage of MMMs capital comes from debt, preferred stock, and common equity This information can be found on the firms latest annual balance sheet. (As of year end 2017, had no preferred stock.) Total debt includes all interest-bearing debt and is the sum of short-term debt and long-term debt. a. Recall that the weights used in the WACC are based on the companys target capital structure. If we assume that the company wants to maintain the same mix of capital that it currently has on its balance sheet, what weights should you use to estimate the WACC for ? b. Find MMMs market capitalization, which is the market value of its common equity. Using the sum of its short-term debt and long-term debt from the balance sheet (we assume that the market value of its debt equals its book value) and its market capitalization, recalculate the firms debt and common equity weights to be used in the WACC equation. These weights are approximations of market-value weights. Be sure not to include accruals in the debt calculation.
- TB MC Qu. 10-86 (Static) When treasury stock is acquired, what... When treasury stock is acquired, what is the effect on total stockholders' equity? Multiple Choice Decrease Increase No effect Cannot determine from the given information0: خاص A moodle1.du.edu.om Question 9 Not yet answered Marked out of 1 P Flag question The process of evaluating securities by historical data like trade volume and share price data is called Select one: O a. None of the options O b. Technical Analysis O c. Fundamental Analysis O d. Quantitative Analysis Previous page Finish attempt ... ( Assignment 1 Jump to... LECTURE ► Quiz navigattonIG Text Direction OSh -122 A A 市 |ワ介←11V Arrange Quick Styles Align Text- Sh abc AV- Aa - T T4 Convert to SmartArt- Sh Font Paragraph Drawing EXAMPLE 6: Calculate the Earnings Per Share(EPS) from the following data. OMR 6,00,000 Net Profit after Tax 10,00,000 10% Preference Share Capital (OMR 10 each) per share) 10,00,000 Equity Share Capital (OMR 10 SINO
- Question 3 of 4 0/0.5 View Policies Show Attempt History Current Attempt in Progress Your answer is incorrect. You know that the return of Wildhorse Cyclicals common shares is 1.1 times as sensitive to macroeconomic information as the return of the market. If the risk-free rate of return is 4.60 percent and market risk premium is 5.71 percent, what is Wildhorse Cyclicals' cost of common equity capital? (Round intermediate calculation to 5 decimal places, e.g. 1.25140 and final answer to 2 decimal places, e.g. 15.25%.) Cost of common equity capital eTextbook and Media Save for Later Attempts: 2 of 3 used Submit Answer APR 山T( !!METHODS Question 5 of 30 Theory believes that dividend or capital gains has an impact on the price of the stock. Select the correct response Dividend relevance theory Dividend irrelevance theory Bird-out-hand theory None of the choices ( Previous ContinQuestion 3U Answer saved Marked out of 2.00 P Flag question If Muscat Tiles has preferred stock at $120 per share, the cost of preferred stock 0.135, then what is a stated dividend if the flotation cost is 3%? Select one: а. 16.69 Ob. 16.20 c. 15.71 Od. 17.12 O e. All the given choices are not correct Clear my choice