The directors of JN60 have been told that they can reduce the overall cost of capital by issuing more long-term debt. Write a memo (in good form) outlining the extent to which increasing the gearing of the company could have the desired effect.
Answers
Memo
Date: [Insert Date]
To: Directors of JN60
From: [Your Name]
Subject: Potential Impact of Increasing Gearing on Reducing Overall Cost of Capital
The purpose of this memo is to assess the extent to which increasing the gearing of JN60 could potentially have the desired effect of reducing the overall cost of capital.
While increasing the company's long-term debt can lead to a lower cost of capital in certain situations, it is important to consider both the advantages and disadvantages associated with higher gearing levels.
By carefully evaluating the company's financial position, market conditions, and risk tolerance, the directors can make an informed decision regarding the potential benefits of increasing the gearing of JN60.
Increasing the gearing of JN60, through issuing more long-term debt, has the potential to reduce the overall cost of capital for the company. This can be achieved due to the tax advantages associated with debt financing.
Interest payments on debt are tax-deductible, which lowers the taxable income of the company and consequently decreases the tax liability. As a result, the cost of debt is effectively reduced compared to the cost of equity.
However, it is important to note that increasing gearing also carries certain risks and considerations. Higher levels of debt introduce additional financial obligations in the form of interest payments, which can strain the company's cash flow and financial flexibility.
Increased reliance on debt financing can also elevate the company's financial risk, as higher levels of debt imply higher interest payments and potential default risk. This can adversely impact the company's creditworthiness and increase borrowing costs in the future.
To determine the extent to which increasing gearing can have the desired effect, the directors should thoroughly assess JN60's financial position and evaluate its ability to service additional debt.
Factors such as the company's current debt-to-equity ratio, interest coverage ratio, profitability, and cash flow generation should be carefully analyzed.
Additionally, the risk tolerance of the company should be taken into account. A higher gearing level may be suitable for a company with stable cash flows and low financial risk, whereas a company operating in a volatile industry or facing uncertain market conditions may prefer to maintain a conservative capital structure.
In conclusion, increasing the gearing of JN60 through issuing more long-term debt has the potential to reduce the overall cost of capital.
However, it is essential for the directors to conduct a comprehensive analysis of the company's financial position, evaluate market conditions, and consider the associated risks.
By making an informed decision, the directors can determine whether increasing gearing aligns with the company's financial objectives and risk tolerance, and if it will indeed lead to the desired reduction in the overall cost of capital.
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Related Questions
What type of loan uses real estate for security?
A point of sale
A line of credit
. A disclaimer (it’s not disclaimer)
A second mortgage
Answers
Answer:
A second mortgage loan uses real estate for security
Which describe the type of sediment you might expect to find across the profile?
Answers
The type of sediment that you might expect to find across the profile is known as "soil horizons." Soil profiles describe the different layers of soil that one can find across a particular area or landscape.
The type of sediment that one might expect to find across the profile includes organic materials, decomposed plants, animal remains, and minerals.The soil horizon is the layer of soil that forms when organic materials and minerals accumulate over time. A soil horizon is formed from the decomposition of plant and animal remains. The topmost layer of the soil horizon is known as the O horizon, which contains organic matter. The next layer is the A horizon, which contains minerals and organic matter.The B horizon is the third layer of the soil horizon, which contains clay minerals and other materials that have been washed down from the upper layers of the soil. Finally, the C horizon is the layer of soil that contains the parent material from which the other soil horizons are formed.In conclusion, the type of sediment that one might expect to find across the profile includes soil horizons, which are formed from the accumulation of organic materials and minerals over time.
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If capacity utilization is 98 percent, a. potential GDP will be 20-30% lower than it was for the prior year. O b. many workers will be laid off. Oc. the unemployment rate will be lower than the natural rate of unemployment.
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If capacity utilization is 98 percent, the unemployment rate will be lower than the natural rate of unemployment.(Option c).
Capacity utilization refers to the ratio of actual production to potential production that could be produced in a given period under ideal circumstances. When production is in a steady state, the degree of capacity utilization is important. Capacity utilization at or above the ideal level is beneficial to an economy because it leads to higher GDP and more employment. If capacity utilization is 98%, it implies that it is near the peak level of performance, and the economy is working efficiently. Many businesses, on the other hand, have a 100 percent capacity utilization target, which indicates that they have no extra capacity to increase their output. As a result, it is not always necessary to have a high degree of capacity utilization, as businesses can adjust their output to match demand.When capacity utilization is high, the unemployment rate is likely to be lower than the natural rate of unemployment, and there will be a shortage of labor, which may lead to wage inflation. As a result, if the economy is operating at or near full capacity, wages may rise, but there will be less job loss in general. Therefore, the correct answer is "the unemployment rate will be lower than the natural rate of unemployment."
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What does formula do In a spreadsheet program
Answers
Answer:
It uses data entered in certain cells to calculate values for other cells.
Explanation:
If a company is using accrual basis accounting, when should it record revenue?A) When cash is received, even though services may be performed at a later date.B) When services are performed, even though cash may be received at a later date.C) Before services are performed.D) When cash is received, 30 days after the completion of the services.
Answers
B) When services are performed, even though cash may be received at a later date. if a business use accrual basis accounting. It should generate record sales When services are rendered, even though payment can be made later
One of the two most popular accounting techniques and the recommended bookkeeping technique for giving a precise financial picture of a company's commercial activities is accrual basis accounting. Accounting on an accrual system records revenue and corresponding costs as they are incurred, rather than when money is exchanged. Accordingly, businesses report revenue when it is generated rather than when it is received. Additionally, it entails recording costs as soon as the business assumes the associated duty rather than after payment. The matching principle and the revenue recognition principle are combined in accrual basis accounting. According to the matching principle, costs must be recorded in the same time as the revenue they contribute to.
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g freedoms journal guiding questipnwhen were these advertisements published? 2) what are three things these advertisements have in common?
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The advertisements were published in March 16, 1827 and things these advertisements have in common well-targeted headline that includes or assumes an advantage to the reader.
Advertising refers to the methods used to draw attention to a good or service. In order to attract consumers' attention, advertising seeks to highlight a good or service. It is often used to market a particular product or service, although there are many other applications as well, with commercial advertising being the most popular.
Through "branding," which links a product name or image with particular traits in customers' minds, commercial advertising frequently aim to boost consumption of their goods or services. Direct-response advertising, on the other hand, is the term used to describe advertisements that aim to prompt a quick sale. Political parties, religious institutions, and governmental organisations are examples of non-commercial organisations that promote themselves more than consumer goods or services.
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The Golden Rule means to treat others the way you want to be treated. This should prevent you from being rude, ugly, mean, dishonest, lazy, disloyal or dishonorable. True False
Answers
Answer:
True
Explanation:
You should always treat others the way you want to be treated. If you were the one who could be treated badly, would your actions be different?
Have a nice day!
According to your results of the test, write a 4-5 sentence summary of your personality.
My test results describe me as a ______ parrot______ (animal), which means that I…
WHOEVER HELPS GETS 20 POINTS
Answers
Answer: am rebellious, outgoing, and expressive
Explanation:
A major drugstore chain whose stocks are traded on the New York Stock Exchange was considering a 2-for 5 reverse split. If the pre-split market cap was 1.71B, what would the post-split market cap be?
Answers
A major drugstore chain whose stocks are traded on the New York Stock Exchange was considering a 2-for 5 reverse split. the post-split market cap be 684 million
What is market cap?Generally, In a 2-for-5 reverse split, every 5 shares of stock are combined into 2 shares. This means that the number of outstanding shares of stock will be reduced by 2.5 times. If the pre-split market cap is 1.71B, the post-split market cap can be calculated by dividing the pre-split market cap by 2.5:
1.71B / 2.5 = 684 million
So, the post-split market cap would be approximately 684 million. Please note that this calculation is based on the assumption that the value of the company's stock remains the same after the reverse split. In practice, the value of the stock may change as a result of the reverse split.
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Which of the following is the type of supplier integration where suppliers establish manufacturing facilities closeby?
a. Collaborative forecasting
b. Vendor managed inventory
c. Insourced warehousing
d. Early supplier involvement in NPD
e. Supplier-integrated manufacturing
Answers
The correct answer is e. Supplier-integrated manufacturing. In this type of supplier integration, suppliers establish their manufacturing facilities in close proximity to the buyer's facilities.
This arrangement allows for better coordination, communication, and sharing of resources between the buyer and the supplier. It enables faster response times, reduced transportation costs, and increased supply chain efficiency. By locating manufacturing facilities nearby, both parties can collaborate closely, streamline production processes, and optimize the flow of goods, leading to improved quality control, lower lead times, and enhanced overall operational performance. Supplier-integrated manufacturing promotes stronger partnerships and facilitates a seamless integration of the buyer's and supplier's manufacturing capabilities.
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A product’s value depends both on its utility and its scarcity.
True or false
Answers
Answer:
true
Explanation:
why is askom regarded as a monopoly
Answers
Answer:
Because it has no substitute s
The triple bottom line "people/social" and it's relationship with social responsibility
Answers
Answer:
TBL was proposed by Elkington. But there is difficulty in measuring social and environmental bottom line.
Explanation:
Triple bottom Line (TBL) in economics is the line that focus on the relationship on social and environmental concern. In TBL there are three bottom line that is people, profit, and planet. This term Triple Bottom Line was coined by John Elkington in 1994.
His main aim was to measure the performance of people in America. According to this idea it is possible to maintain both economy and environment. It can improve the lives of people as well can save the environment. It can be called a full time cost business. It is like Planet + People = Environmental responsibility + Social.
According to TBL if a company does not pay attention on how to interact socially but only focuses on business, it will not account full business.
The triple bottom line is a concept that states that rather than firms to focus on making profit as sole of operation, they should also commit their impact to the social and environment sphere.
The triple bottom line is divided into 3 according to importance to be given:
People / Social impactPlanet / Environmental impactProfit / Financial impact.In conclusion, the business concept posit that firms should ensures that its impact are felt in any social and environmental circle around the world.
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true or false: larry will receive dividends after preferred stockholders.
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False. Preferred stockholders typically receive dividends before common stockholders, such as Larry.
In a corporation, dividends are a distribution of a company's profits to its shareholders. Preferred stockholders are those who have a higher claim on the company's assets and earnings than common stockholders in the event of liquidation. As a result, preferred stockholders typically receive dividends before common stockholders.
However, if the company is not generating enough profits to pay dividends to both preferred and common stockholders, preferred stockholders may be entitled to receive dividends before common stockholders. This is known as a "participating preferred" stock, where the dividend is a percentage of the company's earnings.
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what purpose does a quality deficiency log serve? a report used to track delivery of materials to the jobsite a report used to track questionable quality and safety performance on the jobsite a report used to track changes to project scope a report used to track personnel on the jobsite
Answers
A quality deficiency log serves as a report used to track questionable quality and safety performance on the jobsite.
A quality deficiency log is used to record and track all identified deficiencies related to quality and safety performance on a jobsite. This log helps to document and communicate issues that need to be addressed and resolved in order to maintain the quality and safety of the work being performed. By keeping track of deficiencies, contractors can ensure that corrective actions are taken to prevent future occurrences of the same issues. In summary, a quality deficiency log is an essential tool for ensuring the quality and safety of work performed on a jobsite.
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Which of the following statements describes GAAP?
A. GAAP standards are written and regulated by the government.
B. It is legally required that all companies meet GAAP standards.
C. Companies that meet GAAP standards usually use cash basis accounting.
D. GAAP recommends accrual basis accounting.
Answers
The statement that describes GAAP is that GAAP recommends accrual basis accounting.
Generally accepted accounting principles refers to the standards and accounting rules that are used for financial reporting.The four main principles of GAAP include consistency, objectivity, materiality and prudence. It should also be noted that Generally accepted accounting principles make use of the accrual basis accounting because sales are recorded at the time that they occur. This is vital in providing a better insight into the affairs and the performance of a company.
In conclusion, the correct option is D.
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How important is money
Answers
Answer:
very important
Explanation:
money is a global income source for everyone. we all have different types but it is all still money. now say one country got rid of money and had people pay for stuff using other things. if china did that lots of different countries wouldn't be able to get stuff from there unless they had so much of that product they could just give it up.
Publishers and printing companies are both involved with books, magazines, and newspapers. One type of company is
considered part of the manufacturing section, because it produces the physical product: books, magazines,
newspapers, and so on. What sector does publishing belong to, since it does not produce a tangible product (until
printing transforms it into one)?
O primary, because it makes original content
secondary, because it transforms ideas into physical objects
tertiary, because it provides a service
quaternary, because it involves research
Answers
Answer:
quaternary, because it involves research
Explanation:
An architect’s functions may include which of the following? (SELECT ALL THAT APPLY.)
-planning and designing houses, commercial buildings, and other structures
-ensuring worksite safety
-collaborating with engineers
-acting as a construction manager and supervising contractors
Answers
Answer:
the answer is planning, ensuring, and acting
negotiated transfer prices . multiple select question.are consistent with decentralizationpreserve the autonomy of the divisionsensure that the supplying division will receive a market priceensure that all common costs will be covereduse manager expertise in weighing the costs and benefits of the transfer
Answers
Negotiated transfer prices refer to the agreed-upon prices between two divisions of the same company for goods or services exchanged.
When using negotiated transfer prices, there are several benefits that come with it. Firstly, it is consistent with decentralization, which means that each division has control over their operations and decision-making, leading to more efficient and effective outcomes. Secondly, it preserves the autonomy of the divisions, which helps to maintain healthy competition between them, thus promoting innovation and growth.
Thirdly, negotiated transfer prices ensure that the supplying division receives a market price for their goods or services, which incentivizes them to produce high-quality products.
Fourthly, it ensures that all common costs will be covered, which helps to prevent any unfair advantage for one division over another. Lastly, it uses manager expertise in weighing the costs and benefits of the transfer, which helps to ensure that the company is making informed and strategic decisions.
Overall, negotiated transfer prices are an effective way to ensure fair and efficient exchanges between divisions, leading to better outcomes for the company as a whole.
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Critique the demand management and forecasting as an effective
tool to avoid stockouts. Support your answer with some recent
research paper arguments?
Answers
Demand management and forecasting serve as effective tools to avoid stockouts. By accurately predicting demand, managing inventory efficiently, and meeting customer needs, businesses can enhance customer satisfaction, reduce costs, and maintain a competitive edge in the market.
According to recent research papers, here are some arguments supporting this claim:
1. Accurate demand forecasting: Demand management allows businesses to accurately predict customer demand for their products. By analyzing historical data and market trends, companies can forecast future demand levels. This helps them plan production and inventory levels accordingly, reducing the chances of stockouts.
2. Effective inventory management: Demand management helps in maintaining optimal inventory levels. By understanding demand patterns, businesses can plan their procurement and production schedules. This ensures that enough stock is available to meet customer demand, minimizing the risk of stockouts.
3. Enhanced customer satisfaction: By avoiding stockouts, businesses can provide customers with consistent availability of products. This leads to improved customer satisfaction and loyalty. Satisfied customers are more likely to make repeat purchases and recommend the brand to others, resulting in increased sales and profitability.
4. Cost savings: Stockouts can result in lost sales opportunities and increased costs due to rush orders or expedited shipping. Effective demand management helps optimize inventory levels, reducing carrying costs and minimizing the need for emergency restocking. This results in cost savings for businesses.
In conclusion, demand management and forecasting serve as effective tools to avoid stockouts. By accurately predicting demand, managing inventory efficiently, and meeting customer needs, businesses can enhance customer satisfaction, reduce costs, and maintain a competitive edge in the market.
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Create a poster that illustrate the advantages and disadvantages of online marking
no essay just need a poster
Answers
Large printed sheets with photos and text that are typically exhibited in public spaces to advertise something are known as posters. It is a very powerful strategy for marketing a good, service, or occasion. The merits and demerits of Online marketing have been mentioned below.
Global research, which enables web marketing to reach every door, is one of its greatest benefits. Online marketing is substantially less expensive than conventional marketing strategies.
The bad criticism associated with online marketing can damage a company's reputation. It takes a lot of time since the proper plan must be carefully considered.
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Which occurrence is an emerging trend in International agricultural marketing? A the percentage of agricultural trade is decreasing В. the percentage of agricultural trade is increasing C.agricultural markets around the world are shrinking D. developing nations have moved from net importers to net exporters E. developed nations have stopped trading in agriculture
Answers
Answer:
answer is b
Explanation:
Answer:
the answer is b
Explanation:
i got it right on edmentum
1. Juan i enrolled in marketing education coure and i 17 year old. Juan ha been hired by an electrical contractor. Juan i hoping to ue thi job a a cooperative work ite placement. You are told that Juan’ job i to pull electrical component out of inventory and drive them to the job ite
Answers
Juan is a 17-year-old enrolled in marketing education courses who has been hired by an electrical contractor as an inventory component puller and delivery driver for job sites.
Juan's job as an inventory component puller and delivery driver for an electrical contractor involves taking electrical components out of the company's inventory and driving them to job sites. This job is a cooperative work site placement for Juan, who is pursuing a marketing education and is hoping to use this experience to further his career.
The job requires Juan to be responsible for ensuring that the components are properly pulled and loaded onto the vehicle, and that they are delivered to the job site in a timely and efficient manner. This position will give Juan valuable hands-on experience in the electrical contractor industry, as well as the opportunity to apply the marketing education he is currently studying.
This question should be written as:
Juan is enrolled in marketing education courses and is 17 years old. Juan has been hired by an electrical contractor. Juan is hoping to use this job as a cooperative work site placement. You are told that Juan’s job is to pull electrical components out of inventory and drive them to the job site.Learn more about marketing here: brainly.com/question/25640993
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What could be an industry I could choose because I’m really confused with this whole thing !!! Please help (this is photography but I put business)
Answers
Am I beautiful please give a honest reply.
Answers
Answer:
ive never met you but your always pretty on th einside :3
Explanation:
yes you are queen dwell on the beauty of life. Watch the stars, and see yourself running with them.
which manufacturing strategy can be described as producing products to put into inventory based on a demand forecast
Answers
The make-to-stock manufacturing (MTS) strategy can be described as producing products to put into stock based on a demand forecast.
In this strategy, companies do not maintain productive stability over a period of time, but adjust their manufacturing strategy according to times when demand can increase or decrease.
Some advantages of the make-to-stock strategy are:
Economy of scale.Waste reduction.Efficiency in the use of resources.Increased response time.So this is an effective manufacturing strategy for companies that can accurately forecast their demand.
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Beale Management has a noncontributory, defined benefit pension plan. On December 31, 2021 (the end of Beale's fiscal year), the following pension-related data were available:
Projected Benefit Obligation ($ in millions)
Balance, January 1, 2021 $ 780
Service cost 80
Interest cost, discount rate, 5% 39
Gain due to changes in actuarial assumptions in 2021 (23 )
Pension benefits paid (39 )
Balance, December 31, 2021 $ 837
Plan Assets ($ in millions)
Balance, January 1, 2021 $ 820
Actual return on plan assets 49
(Expected return on plan assets, $54)
Cash contributions 90
Pension benefits paid (39 )
Balance, December 31, 2021 $ 920
January 1, 2021, balances: ($ in millions)
Pension asset $ 40
Prior service cost—AOCI (amortization $9 per year) 45
Net gain—AOCI (any amortization over 10 years) 142
Required:
Prepare a pension spreadsheet to show the relationship among the PBO, plan assets, prior service cost, the net gain, pension expense, and the net pension asset. (Enter credit amounts with a minus sign and debit amounts with a positive sign. Enter your answers in millions. )
Answers
The Beale Management Pension Expense includes the service cost of $80 million, interest cost of $39 million, and the gain of ($23) million due to changes in actuarial assumptions.
The pension spreadsheet the gain due to changes in actuarial assumptions and the actual return on plan assets. Net Gain/Loss = Gain due to changes in actuarial assumptions - Actual return on plan assets Net Gain/Loss = -23 - 49 Net Gain/Loss = 72 Service Cost. This is the cost of pension benefits earned by employees during the year. Service Cost = 80 .This is the interest expense on the projected benefit obligation. Interest Cost = PBO (beginning of year) × Discount Rate Interest Cost = 780 × 0.05 Interest Cost = 39
Expected Return on Plan Assets. This is the expected return on the assets held in the pension plan. Expected Return on Plan Assets = 54 Amortization of Prior Service Cost. This is the annual amortization of the prior service cost. Amortization of Prior Service Cost = 9
Pension Expense.This is the total expense recognized for the pension plan during the year. Pension Expense = Service Cost + Interest Cost + Net Gain/Loss - Expected Return on Plan Assets + Amortization of Prior Service Cost Pension Expense = 80 + 39 - 72 - 54 + 9
Pension Expense = 2 Net Pension Asset/Liability. This is the difference between the plan assets and the projected benefit obligation. Pension Expense = Service Cost + Interest Cost − Actual Return on Plan Assets ± Amortization of PSC and NG PBO = Beginning PBO + Service Cost + Interest Cost ± Actuarial Gain/Loss − Benefits Paid Plan Assets = Beginning Plan Assets + Actual Return on Plan Assets + Employer Contributions − Benefits Paid PSC and NG are reported in the AOCI (Accumulated Other Comprehensive Income) account.
The beginning balance of the Projected Benefit Obligation (PBO) is $780 million, and various changes contribute to the ending balance of $837 million. The service cost is $80 million, the interest cost is $39 million (calculated using a discount rate of 5%), and there was a gain of $23 million due to changes in actuarial assumptions. Pension benefits paid during the year were $39 million.
The beginning balance of Plan Assets is $820 million, and the ending balance is $920 million. The actual return on plan assets is $49 million, and cash contributions made during the year were $90 million. Pension benefits paid were $39 million. The Prior Service Cost has a beginning balance of $45 million and does not have any changes during the year.
The Net Gain has a beginning balance of $142 million and does not have any changes during the year. The Net Pension Asset at the beginning is $40 million and does not have any changes during the year.
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1 , what are the agent of socialization
Answers
Answer:
Agents of socialization, or institutions that can impress social norms upon an individual, include the family, religion, peer groups, economic systems, legal systems, penal systems, language, and the media.
Explanation:
What is an investment portfolio?
A. A selection of varied accounts
B. A selection of varied instruments
C. A selection of varied applications
D. A selection of varied stocks and bonds
Answers
Answer:
In finance, a portfolio is a collection of investments aka stocks and bonds!