If raminov does not report the apparent illegal

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If Raminov does not report the apparent illegal dumping to those in authority at CMMC, his behavior would not be considered ethical under these standards and his lack of action would discredit the profession. Credibility Communicate information fairly and objectively. Disclose all relevant information that could reasonably be expected to influence an intended user’s understanding of the reports, analyses, or recommendations. Disclose delays or deficiencies in information, timeliness, processing, or internal controls in conformance with organization policy and/or applicable law. All of these standards make it clear that Raminov has an obligation to act objectively in this matter and report the situation to those in authority at CMMC. The risks and exposures of illegal dumping should be disclosed in the financial reports that Raminov is preparing. 2. Initially, Raminov should follow CMMC’s policy regarding the resolution of an ethical conflict. If there is no policy or the policy does not resolve the issue, he should consider the courses of action recommended in IMA’s Statement of Ethical Professional Practice. Since Raminov’s immediate supervisor appears to be involved in the dumping situation, he should submit the issue to the next higher level. If the situation is not satisfactorily resolved, Raminov should approach successive levels of authority, e.g., CFO, audit committee, Board of Directors. He can also contact an IMA ethics counselor or other impartial advisor to discuss possible courses of action. Raminov should consult an attorney regarding his legal obligations and rights in this ethical conflict. 3. It is not considered appropriate for Raminov to inform authorities or individuals not employed or engaged by CMMC unless he believes there is a clear violation of the law. In discussions with his attorney, Raminov should clarify his obligations under the law. If CMMC does not take action after Raminov has informed the appropriate in-house authorities, he may be obligated to inform the regulatory agency involved. He should not under any circumstances anonymously release this information to the local newspaper.
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412 Answer: Question 2.13 - Langley Industries 1. Financing plan (dollars in millions): Current structure Percent of total Funds Needed Retained earnings External sources Debt $175 35% $28 $28 Preferred 50 10% 8 8 Common 275 55% 44 $15 29 Totals $500 100% $80 $15 $65 Financing sources will be as follows: New Debt $28 million New Preferred stock 8 million Retained earnings 15 million New Common stock 1 29 million Total $80 million 1 $29 million ÷ $58 per share = 500,000 new common shares 2. Weighted average cost of capital % of Capital Structure Cost Weighted Cost Debt 35% 6.00% 1 2.10% Preferred 10% 12.00% 1.20% Common 55% 16.00% 8.80% Cost of Capital 12.10% 1 Pre-tax 10% x (1- tax rate) = 6.00% 3. a. If the corporate tax rate was increased, the after-tax cost of debt would be reduced, thereby reducing the cost of capital. In other words, the tax shield of debt becomes more valuable to the firm.
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