Given the Following Information ​
A Determine the Firm's Cost of Capital

question 17

Essay

Given the following information: $$\begin{array} { l c } \text { interest rate } & 8 \% \\\text { tax rate } & 30 \% \\\text { dividend } & \$ 1 \\\text { price of the common stock } & \$ 50 \\\text { growth rate of dividends } & 7 \% \\\text { debt ratio } & 40 \%\end{array}$$ ​
a. Determine the firm's cost of capital.
b. If the debt ratio rises to 50 percent and the cost of funds remains the same, what is the new cost of capital?
c. If the debt ratio rises to 60 percent, the interest rate rises to 9 percent, and the price of the stock falls to $30, what is the cost of capital? Why is this cost different?

Know the role and importance of a bank reconciliation in financial control systems.

Understand the treatment of outstanding checks and deposits in transit in bank reconciliations.

Recognize how notes collected by the bank and NSF checks affect bank reconciliations.

Understand the accounting treatment of petty cash transactions and replenishment.

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Definitions:

Diagnosing Diseases

The process of identifying a disease or condition by its symptoms, history, tests, and other information.

Radioisotope

An isotope of an element that exhibits radioactive decay, emitting radiation in the process.

Beta Particles

High-energy, high-speed electrons or positrons emitted by certain types of radioactive nuclei such as the decay of carbon-14.

Gamma Rays

Electromagnetic radiation of the highest energy and shortest wavelength in the electromagnetic spectrum, resulting from radioactive decay or nuclear reactions.