FarCry Industries, a maker of telecommunications equipment, has 2 million shares of common stock outstanding, 1 million shares of preferred stock outstanding, and 10,000 bonds. Suppose the common shares are selling for $28 per share, the preferred shares are selling for $15.00 per share, and the bonds are selling for 98 percent of pat What weight should you use for debt in the computation of FarCry's WACC? (Round your answer to 2 decimal places.) Weight used
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![Problem 11-11 Weight of Debt (LG11-4)
FarCry Industries, a maker of telecommunications equipment, has 2 million shares of common stock outstanding, 1 million shares of
preferred stock outstanding, and 10,000 bonds. Suppose the common shares are selling for $28 per share, the preferred shares are
selling for $15.00 per share, and the bonds are selling for 98 percent of par
What weight should you use for debt in the computation of FarCry's WACC? (Round your answer to 2 decimal places.)
Weight used
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- Problems 12-9 Reading the financials (LO 12-1, LO 12-2, LO 12-7) You have the following information for Brophy, Inc. Long-Term Debt ($ in millions) 7% debentures, $300 million face value, due Year 11, effective rate $14.6% Zero coupon bonds, $500 million face value, due Year 8, effective rate 12.0% Mortgage debt, $850 million face value, due Year 5, effective rate 8.7%, secured by corporate headquarters Various other long-term debt Total long-term debt Assume the interest for all the bonds are based on annual basis. Required: December 31 Year 2 $ $ 188.6 267.9 834.5 12,444.2 13,735.2 Year 1 $ 182.7 239.2 833.9 16,329.2 $ 17,585.0 1. How much interest expense did the company record during Year 2 on the 7% debentures? How much of the original issue discount was amortized during Year 2? 2. How much interest expense did the company record during Year 2 on the zero coupon bonds? 3. Suppose that interest payments on the mortgage are made on December 31 of each year. What journal entry did…Problem 11-12 Weight of Debt (LG11-4) OMG Inc. has 4 million shares of common stock outstanding, 3 million shares of preferred stock outstanding, and 5,000 bonds. Suppose the common shares are selling for $27 per share, the preferred shares are selling for $26 per share, and the bonds are selling for 108 percent of par. What weight should you use for debt in the computation of OMG's WACC? (Round your answer to 2 decimal places.) Weight used %QUESTION 6 Sorenson Co. is considering the following alternative plans for financing the company: Plan 1 Plan 2 Issue 10% bonds (at face) $100,000 Issue $10 poar common stock $150,000 50,000 Income tax is estimated at 40% of income. Determine the earnings per share of common stock under the two alternative financing plans, assuming income before bond interest and inc $39,000. Round your ansers to two decimal places. Earnings Per Common Share Plan 1 $ Plan 2 $ THIS QUESTION WILL ALSO BE CHECKED MANUALLY. QUESTION 7 On the first day of the fiscal year, a company issues a $960,000, 8%, 5-year bond that pays semiannual interest of $38,400, receiving ca n the chart of accounts below
- #17 On January 1, 2022, ABC Co. has 100,000 outstanding ordinary shares. On May 1, 2022, ABC issued 3,000 P 1,000 convertible bonds payable with 12% rate. Each bond is convertible into six ordinary shares. By October 1 of the same year, all the bonds are converted. By year-end, ABC reported net income of P 4,000,000. Income tax rate is 30%. How much is the interest expense to be added back to net income for diluted EPS computation?Problem 11-21 WACC Weights (LG11-4) BetterPie Industries has 3 million shares of common stock outstanding, 2 million shares of preferred stock outstanding, and 10,000 bonds. Assume the common shares are selling for $46 per share, the preferred shares are selling for $23.50 per share, and the bonds are selling for 98 percent of par. What would be the weights used in the calculation of BetterPie's WACC? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Equity weight Preferred stock weight Debt weight % % % de deProblem 11-21 WACC Weights (LG11-4) BetterPie Industries has 3 million shares of common stock outstanding, 2 million shares of preferred stock outstanding, and 10,000 bonds. Assume the common shares are selling for $45 per share, the preferred shares are selling for $22.50 per share, and the bonds are selling for 98 percent of par. What would be the weights used in the calculation of BetterPie’s WACC? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Equity weight % Preferred stock weight % Debt weight %
- PB3. 13.2 Starmount Inc. sold bonds with a $50,000 face value, 12% interest, and 10-year term at $48,000. What is the total amount of interest expense over the life of the bonds?MC algo 16-6 Debt And EPS Cross Town Cookies is an all-equity firm with a total market value of $790,000. The firm has 46,000 shares of stock outstanding. Management is considering issuing $203,000 of debt at an interest rate of 7 percent and using the proceeds to repurchase shares. Before the debt issue, EBIT will be $72,200. What is the EPS if the debt is issued? Ignore taxes. Multiple Choice $1.96 $1.70 $1.41 $1.84 $.99 O O O O OPB2. LO 13.1 Charleston Inc. issued $200,000 bonds with a stated rate of 10%. The bonds had a 10-year maturity date. Interest is to be paid semi-annually and the market rate of interest is 8%. If the bonds sold at 113.55, what amount was received upon issuance?
- Problem 12-1 (Static) Securities held-to-maturity; bond investment; effective interest; financial statement effects [LO12-1, 12-2] Fuzzy Monkey Technologies, Incorporated purchased as a long-term investment $80 million of 8% bonds, dated January 1, on January 1, 2024. Management has the positive intent and ability to hold the bonds until maturity. For bonds of similar risk and maturity the market yield was 10%. The price paid for the bonds was $66 million. Interest is received semiannually on June 30 and December 31. Due to changing market conditions, the fair value of the bonds at December 31, 2024, was $70 million. Required: 1. to 3. Prepare the relevant journal entries on the respective dates (record the interest at the effective rate). 4. At what amount will Fuzzy Monkey report its investment in the December 31, 2024 balance sheet? 5. How would Fuzzy Monkey's 2024 statement of cash flows be affected by this investment? (If more than one approach is possible, indicate the one that…Brief Exercise 14-8 (Algo) Investment in bonds [LO14-2] On January 1, a company purchased 3%, 10-year corporate bonds for $73,459,316 as an investment. The bonds have a face amount of $80 million and are priced to yield 4%. Interest is paid semiannually. Prepare a partial amortization table at the effective interest rate on June 30 and December 31. Prepare the journal entries necessary to record revenue at the effective interest rate on June 30 and December 31. Complete this question by entering your answers in the tabs below. Amortization General Journal Prepare a partial amortization table at the effective interest rate on June 30 and December 31. Note: Round intermediate calculations and your final answers to the nearest whole dollar. Period-End Cash Interest Bond Interest Received Revenue Discount Amortization Carrying Value January 1 $ 73,459,316 June 30 December 31Problem 12-1 (Algo) Securities held-to-maturity; bond investment; effective interest; financial statement effects [LO12-1, 12-2] Fuzzy Monkey Technologies, Incorporated purchased as a long-term investment $120 million of 6% bonds, dated January 1, on January 1, 2024. Management has the positive intent and ability to hold the bonds until maturity. For bonds of similar risk and maturity the market yield was 8%. The price paid for the bonds was $100 million. Interest is received semiannually on June 30 and December 31. Due to changing market conditions, the fair value of the bonds at December 31, 2024, was $110 million. Required: 1. to 3. Prepare the relevant journal entries on the respective dates (record the interest at the effective rate). 4. At what amount will Fuzzy Monkey report its investment in the December 31, 2024 balance sheet? 5. How would Fuzzy Monkey's 2024 statement of cash flows be affected by this investment? (if more than one approach is possible. indicate the one that…
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