Bird Corporation Has Several Subsidiaries That Are Included in Its

question 4

Multiple Choice

Bird Corporation has several subsidiaries that are included in its consolidated financial statements and several other investments in corporations that are not consolidated.In its year-end trial balance,the following intercompany balances appear.Ostrich Corporation is the unconsolidated company;the rest are consolidated. What amount should Bird report as intercompany receivables on its consolidated balance sheet?

• A)$0
• B)$10,000
• C)$30,000
• D)$63,000

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Definitions:

Cost of Debt

The effective rate that a company pays on its current debt, often calculated by taking the average interest rate it pays on all of its debt instruments.

WACC

Weighted Average Cost of Capital, a measure used to estimate the average rate of return a company is expected to pay its securities holders.

Cost of Common Stock

The return required by equity investors given the risk of the investment in a company's common stock, often used as a component in calculating the cost of capital.

Marginal Shareholder

An investor perceived to be influential in determining a stock's price by their decisions to buy or sell at the margin.