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Accounting
cant Universiti... pages: 7 U Algoma 508 er 14 Sources of Capital 8 / 650 2 Required Calculate the weighted average cost of capital under each of the follow- ing (independent) alternatives, assuming that the size of the company does not change: (a) No change (b) Borrowing $5 million at 8% interest and using it to pay a dividend of $5 million (c) (d) Borrowing $50 million at 8% interest and using it to pay a dividend of $50 million 6. Peebles Inc. has made a net income of $1,000,000. How much dividend should the company pay to its common shareholders? Borrowing $98 million at 8% interest and using it to pay a dividend of $98 million Scenario #1 The following information pertains to Problems #7 and #8. Below are Glasgow Co.'s financial statements for 2020: Glasgow Co. Statement of Retained Earnings for 2020 ($ millions) Retained earnings brought forward at January 1, 2020 Net income for 2020 hp 9 K. 3 f10 O 30 0 1/4 P 1/2 112 { [[ 3/4 } prt sc ] ]]> $250 500 $750
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