Explain the equity method with regards to the application of the 20 percent rule, is this...
Explain the equity method with regards to the application of the 20 percent rule, is this always strictly applied?
Homework Answers
| Equity method used when investor company have significant influence over on investee company. Generally, Application of the 20 percent rule is based on presumed that Investor company has the ability to exercise significant influence on investee company. | ||||||
| Some time possible that Investor company may not able to exercise significant influence even if investor company have 20% or more voting right in investee company. In reverse side, Sometimes possible also that Investor company may be able to significant exercise significant influence even if Investor company have less than 20% voting right. Reason for significant influence even if less than 20% voting right in investee company their representative such as Board of directors, participation in the policy-making process, interchange in managerial personal or dependency on technology. |
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Explain the equity method with regards to the application of the
20 percent rule, is this...
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Answer the questions plz Application Question #7 - With regards to reproductive cloning, answer the following:...
Answer the questions plz
Application Question #7 - With regards to reproductive cloning, answer the following: A. What is reproductive cloning? B. How can this technique potentially be used in medicine? C. What are the limitations to reproductive cloning? Learning Objective VI: Explain the process of gene therapy and it uses in medicine (p. 235, 236). Application question #8- DNA therapy uses genetic engineering with hopes of finding the cure to certain genetic diseases. For a real-life example, watch the...
show all work OUE rate is 10 percent? 20 percent? eISIUNS nder the NPV rule in...
show all work
OUE rate is 10 percent? 20 percent? eISIUNS nder the NPV rule in part (d) consistent w LISIRR Consider the following ca er the NPV rule in part (d) consistent with those of the IRR rule? NPV versus eation Corporation. Both projects require an annual return of 15 percent. sh flows on two mutually exclusive projects for the Bahamas YEAR DEEPWATER FISHING NEW SUBMARINE RIDE -$835,000 450,000 410,000 335,000 0 -$1,650,000 1,050,000 675,000 520,000 3 As a...
In regards to Social Security benefits: a. Up to 100 percent of Social Security benefits received...
In regards to Social Security benefits: a. Up to 100 percent of Social Security benefits received may be included in taxable income. . The Social Security inclusion formula is the same amount for each filing status. c. Social Security benefits are always excluded because wages are subject to Social Security tax when earned. d. Tax-free interest income must be included in the formula used to determine if Social Security is included in taxable income.
Lannister Manufacturing has a target debt-equity ratio of 0.62. Its cost of equity is 20 percent,...
Lannister Manufacturing has a target debt-equity ratio of 0.62. Its cost of equity is 20 percent, and its cost of debt is 12 percent. If the tax rate is 32 percent, what is the company's WACC? Multiple Choice 12.66% O 14.7% 14.7% 12.69% O 16.24% 16.24%
Suppose that JB Cos. has a capital structure of 80 percent equity, 20 percent debt, and...
Suppose that JB Cos. has a capital structure of 80 percent equity, 20 percent debt, and that its before-tax cost of debt is 14 percemt while its cost of equity is 18 percent. Assume the appropriate weighted-average tax rate is 21 percent and JB estimates that they can make full use of the interest tax shield. What will be JB's WACC? (Round your answer to 2 decimal places.) WACC % Suppose that B2B, Inc. has a capital structure of 35...
Panner, Inc., owns 25 percent of Watkins and applies the equity method. During the current year,...
Panner, Inc., owns 25 percent of Watkins and applies the equity method. During the current year, Panner buys inventory costing $133,600 and then sells it to Watkins for $167,000. At the end of the year, Watkins still holds only $27,000 of merchandise. What amount of gross profit must Panner defer in reporting this investment using the equity method?
Rollins Corporation is estimating its WACC. Its target capital structure is 20 percent debt, 20 percent...
Rollins Corporation is estimating its WACC. Its target capital structure is 20 percent debt, 20 percent preferred stock, and 60 percent common equity. Rollins' beta is 1.7 , the risk-free rate is 5 percent, and the market risk premium is 6 percent. Rollins is a constant-growth firm which just paid a dividend of $2.00, sells for $28 per share, and has a growth rate of 6 percent. The firm's policy is to use a risk premium of 4 percentage points...
Answer the questions plz
Application Question #7 - With regards to reproductive cloning, answer the following: A. What is reproductive cloning? B. How can this technique potentially be used in medicine? C. What are the limitations to reproductive cloning? Learning Objective VI: Explain the process of gene therapy and it uses in medicine (p. 235, 236). Application question #8- DNA therapy uses genetic engineering with hopes of finding the cure to certain genetic diseases. For a real-life example, watch the...
show all work
OUE rate is 10 percent? 20 percent? eISIUNS nder the NPV rule in part (d) consistent w LISIRR Consider the following ca er the NPV rule in part (d) consistent with those of the IRR rule? NPV versus eation Corporation. Both projects require an annual return of 15 percent. sh flows on two mutually exclusive projects for the Bahamas YEAR DEEPWATER FISHING NEW SUBMARINE RIDE -$835,000 450,000 410,000 335,000 0 -$1,650,000 1,050,000 675,000 520,000 3 As a...
In regards to Social Security benefits: a. Up to 100 percent of Social Security benefits received may be included in taxable income. . The Social Security inclusion formula is the same amount for each filing status. c. Social Security benefits are always excluded because wages are subject to Social Security tax when earned. d. Tax-free interest income must be included in the formula used to determine if Social Security is included in taxable income.
Lannister Manufacturing has a target debt-equity ratio of 0.62. Its cost of equity is 20 percent, and its cost of debt is 12 percent. If the tax rate is 32 percent, what is the company's WACC? Multiple Choice 12.66% O 14.7% 14.7% 12.69% O 16.24% 16.24%
Suppose that JB Cos. has a capital structure of 80 percent equity, 20 percent debt, and that its before-tax cost of debt is 14 percemt while its cost of equity is 18 percent. Assume the appropriate weighted-average tax rate is 21 percent and JB estimates that they can make full use of the interest tax shield. What will be JB's WACC? (Round your answer to 2 decimal places.) WACC % Suppose that B2B, Inc. has a capital structure of 35...
Panner, Inc., owns 25 percent of Watkins and applies the equity method. During the current year, Panner buys inventory costing $133,600 and then sells it to Watkins for $167,000. At the end of the year, Watkins still holds only $27,000 of merchandise. What amount of gross profit must Panner defer in reporting this investment using the equity method?
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