What is cost of capital? The cost of capital is the cost of obtaining funds‚ through debt or equity‚ in order to finance an investment. It is used to evaluate new projects of a company‚ as it is the minimum return that investors expect for providing capital to the company‚ thus setting a benchmark that a new project has to meet. Importance The concept of cost of capital is a major standard for comparison used in finance decisions. Acceptance or rejection of an investment project depends on the
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everlasting theme is getting the maximum profit is by minimising cost and taking the least risk. Capital Structure refers to the mix of sources from where the long term funds required in a business may be raised‚ i.e.‚ what should be the proportions of equity share capital‚ preference share capital‚ internal sources‚ debentures‚ and other sources of funds in the total amount of capital which an undertaking may raise for establishing its business. A bad financing decision may result in many forms of higher
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company’s bottom line. If the company is profitable each year investors are likely to invest in the company. What is the ending balance in stockholders’ equity? Why would a labor union potentially be interested in this information? Ending balance of stockholders equity was $45‚520 Millions. Labor unions are interested in company’s stockholders equity as they may suggest to management that dividends paid to investors should be reduced and an increase to employee benefits and negotiate contracts with
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preponderance of electronically available information and the growth of identity theft‚ financial institutions should manage the risks associated with obtaining and using consumer reports.” [1] Gramm-Leach-Bliley Act (GLBA) was introduced in 1999 to protect consumer privacy when data is shared
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BUZZ MARKETING -Buzz marketing is a viral marketing technique that attempts to make each encounter with a consumer appear to be a unique‚ spontaneous personal exchange of information instead of a calculated marketing pitch choreographed by a professional advertiser. Historically‚ buzz marketing campaigns have been designed to be very theatrical in nature. The advertiser reveals information about the product or service to only a few "knowing" people in the target audience. By purposely seeking
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number: show your work. a. Assets = $1‚000; Liabilities = $600; Equity = $400 1000=600+400 A-L=OE b. Assets = $5000; Liabilities = $2‚000; Equity =$3‚000 A= L +0E L+EO= 5000 (A) c. Assets = $1‚500; Liabilities = $500; Equity =$1‚000 1500= 500+ 1000 A=L+OE d. Situation: Assets increased by $1‚000; Liabilities decreased by $600; Did Equity increase‚ decrease‚ or remain the same? If it changed‚ by how much?
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The objective of this Statement is to prescribe the accounting treatment for borrowing costs. Scope 1. This Statement should be applied in accounting for borrowing costs. 2. This Statement does not deal with the actual or imputed cost of owners’ equity‚ including preference share capital not classified as a liability. Definitions 3. The following terms are used in this Statement with the meanings specified: Borrowing costs are interest and other costs incurred by an enterprise in connection with
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7IAS 7 International Accounting Standard 7 Statement of Cash Flows This version includes amendments resulting from IFRSs issued up to 31 December 2008. IAS 7 Cash Flow Statements was issued by the International Accounting Standards Committee in December 1992. It replaced IAS 7 Statement of Changes in Financial Position (issued in October 1977). In April 2001 the International Accounting Standards Board resolved that all Standards and Interpretations issued under previous Constitutions continued
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bankers will consist of J.P.Morgan ‚ it could better explain the creditworthiness and credibility of Merit to the other bankers and facilitate in obtaining such a large amount of loan. * With additional funding of 4 billion being met by debt alone the ownership pattern and voting rights will remain impact. * Debt carries lower cost compared to equity. * The tax advantage of debt can be utilized by the company to improve earnings. The higher financial leverage can give the company higher
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to liability and owner’s equity accounts. a. Debit: all asset accounts normally have debit balances. The increase was greater than the decreases and the result was a debit balance in the account. The fact that assets are located on ht left side of the balance sheet is a convenient means of remembering the rule that an increase in an asset is recorded on the left side and the asset account normally has a debit balance b. Credit: increases in liability and owners equity accounts are recorded by credit
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