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SolutionThe solution is given below −Value of firm and cost of equity can be calculated by following procedure −Market value of a firm (V) is ratio of earnings before income taxes (EBIT) and weighted average cost of capital (WACC).V = EBIT/WACC V = 95000/12.5% V = 760000Total Equity (E) is difference of market value of a firm (V) and market value of Debt (D).E = V – D E = 760000 – 350000 E = 410000Cost of equity (Ke) is ratio of difference between Earnings per share (EBIT) and interest (I) to market value of equity shareholder’s (Es).Ke= (EBIT-I)/Es Es ... Read More
Capital structure of a company depends on mix or ratio of debt and equity in their mode of their financing. Depending on what company prefer, some may have more debt or more equity in financing their asset, but final goal is to maximize their market value and their profits.Net operating income (NOI) was developed by David Durand. According to net operating income approach, firm value is not affected by change in company or firm’s debt components.Net operating income approach says that value of a firm depends on operating income and associated business risk. Value of firm will not be affected ... Read More
Company XCompany YRsRsNet operating income2000020000Cost of debt02500Net income2000017500Cost of equity0.080.10Market value of shares250000175000Market value of debt050000Total value of firm250000225000Cost of capital (Avg)0.950.08Debt equity ratio00.8Assumptions: 1) no corporate tax 2) equilibrium value is 12%.SolutionThe solution is explained below −Company XCompany YRsRsNet operating income2000020000(-)Cost of debt02500Net income2000017500Equilibrium cost of equity (12.5%)0.1250.125Value of firm160000140000Market value of debt050000Market value if equity16000090000
SolutionThe solution is given below −Company X is unlevered, which means, interest on debt is 0.Company y is levered, which means, interest on debt is 7000 (175000*4%)Market valueCompany XCompany YRsRsNet operating income4500045000Interest on debt070004500038000Profit before taxes4500038000Taxes (40%)18000152002700022800Capitalization rate (12%)0.120.12Market value equity225000190000Market value of debt0175000Total value225000365000
SolutionThe solution is as follows −Country 1: No taxesa) Debt to equity ratio is ZeroCost of equity = WACC + (WACC – Cost of debt) * (debt/equity)Cost of equity = 15% + (15% - 5%) * 0 => 10%b) Debt to equity ratio is 1Cost of equity = WACC + (WACC – Cost of debt) * (debt/equity)Cost of equity = 15% + (15% – 5%) * 1Cost of equity = 10% + 5% => 20%c) Debt to equity ratio is 2 Cost of equity = WACC + (WACC – Cost of debt) * (debt/equity)Cost of equity = 15% + (15% – ... Read More
SolutionThe solution is as follows −Cash bookBank statementDividend (Rs.2200/-)Balance (Rs.25000/-)Interest error(Rs.800/-)Uncashed check (Rs.2000/*)Deposited(Rs.3800/-)Uncredited (Rs.3500/-)Cash short(Rs.1200/*)Dues paid(Rs.1000/-)ABC Ltd BankReconciliation statementas on 30th September, XXXXBank overdraft (Dr)25000(+)Check issued (not enchased)2000Dividends on shares (collected by bank)2200Interest charged (recorded twice)800Check deposited (not entered in cash book)3800880033800(-)Cash short (credit side of bank column)1200Dues paid by bank1000Uncredited check (outstation)3500(5700)Balance (as per cash book) (Cr)28100
Trail balance of ABC Company as on 31st April XXXXDebit ($)Credit ($)Banking equipment10000DebtorsBank5000Capital16000Drawings600Loan1800CreditorsServices18000Salaries9500Telephone expenses7002580025800SolutionThe solution is as follows −While preparing income statement, we consider only expenses and income.Income => services => 18000Expenses => salaries + telephone expenses => 9500 + 700 => 10200Income statement for the company ABC for period ending on 31st April XXXXDebit ($)Credit ($)Income18000(services)18000Expenses(10200)Salaries95007800Telephone expenses700Net profit
Sales volumes of A (units)1500016500182001900020000Probability0.150.180.190.210.22Selling price per unit is Rs. 8/- with marginal cost = Rs. 4.80/- and fixed cost = Rs. 42000/-Calculate probability of company’sa) Break evenb) Makes profit of minimum Rs.20000/-SolutionThe solution is explained below −a) Break evenCalculated contribution costContribution cost= sales cost – marginal costContribution cost= 8 – 4.80Contribution cost= 3.20/-Breakeven point = fixed cost / contribution cost= 42000/3.20= 13125 units (app)Probability of sales more than or equal to 8077 unitsProbability of sales = (0.15+0.18+0.22+0.24+0.26) => 0.95 => 95%b) Makes profit of minimum Rs.20000/-Total contribution = (fixed cost) + profit => 42000 + 20000 => 62000 - ... Read More
There are 3 types of profiles that firewall supports. a) Domain b) Public and c) Private profile. You can check the same settings using the GUI in the Windows Firewall Advanced Security settings window as shown below.You can check the above settings using the Get-NetFirewallProfile command.Get-NetFirewallProfile | Select Name, Enabled Name Enabled ---- ------- Domain True Private True Public TrueTo turn off or disable the above profiles using PowerShell, you need to use the command Set-NetFirewallProfile.To disable the specific profile, use -Profile parameter. You can pass 3 different profile ... Read More
Recent windows client and server operating systems like Windows 10, Windows Server 2008 onwards, supports advanced firewall versions and they have mainly 3 profiles.DomainPublicPrivate profile.To get the setting using GUI, you need to search in the box Windows Firewall with Advanced Security or Windows Defender Firewall with Advanced Security. Then you can see in the console that 3 available profiles.The above same settings can be viewed with the PowerShell Get-NetFirewallProfile command.PS C:\> Get-NetFirewallProfile Name : Domain Enabled : True DefaultInboundAction : NotConfigured DefaultOutboundAction : NotConfigured AllowInboundRules : NotConfigured AllowLocalFirewallRules : NotConfigured AllowLocalIPsecRules : NotConfigured AllowUserApps : NotConfigured AllowUserPorts : NotConfigured ... Read More