Company cost of capital (5/20 (8%) + (15/20 (20%) = 17%. The market value of Cable Company's equity is $60 million and the market value of its debt is $40 million. If the required rate of return on the equity is 15% and that on its debt is 5%, calculate the company's cost of capital (Assume no taxes)
Answers
The Company's cost of capital is 9.1%
Company's Cost of Capital: The cost of capital is the minimum rate of return that a company needs to earn to attract investors to purchase its stocks or bonds and finance its operations.
It's made up of the costs of equity and debt financing for a company. The cost of equity is the return required by investors to invest in the company, while the cost of debt is the return required by lenders. The cost of capital is calculated as a weighted average of these two costs given in percentage terms.
Calculating the cost of capital:
The formula for calculating the cost of capital:
WACC = (E/V × Re) + [(D/V × Rd) × (1 - Tc)]
where,
E is the total market value of the company's equity,
D is the total market value of the company's debt,
V = E + DRe is the cost of equity, Rd is the cost of debt,
E/V is the percentage of financing that is equity,
D/V is the percentage of financing that is debt,
Tc is the corporate tax rate.
The cost of capital can be calculated using the given values:
E = 60 million
D = 40 million
Total Value of the Company (V) = E + D = 60 + 40 = 100 million
Cost of Equity (Re) = 15%Cost of Debt (Rd) = 5%
Corporate Tax Rate (Tc) = 0%(as per the question it is assumed)
The weights are given in the question.
Equity weight = 60/100 = 0.6
Debt weight = 40/100 = 0.4
Plugging these values into the formula we get:
WACC = (E/V × Re) + [(D/V × Rd) × (1 - Tc)]
WACC = (0.6 x 15) + [(0.4 x 5) × (1 - 0)]
WACC = 9 + (0.02 x 5)
WACC = 9 + 0.1 = 9.1%
Therefore, Answer: 9.1%.
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Related Questions
Angelo has a savings account worth $1000 that earns 2% interest, a student loan of $40,000 that charges 4.6% interest, and a credit card bill that has $1500 on it with a 23.4% interest rate. He has a budget surplus of $300 at the end of the month. What should he do with the $300?
Answers
Based on the information given what he should with the $300 is: Pay it toward his credit card bill, because it has the highest interest rate.
What is interest rate:
Interest rate can be defined as the amount that is charge on the amount borrowed or loan amount.
Based on the given details the interest rate given are;
Saving account=2% of $1,000
Student loan=4.6% of $40,000
Credit card bill=23.4% of $1,500
We can see that credit card bill has the highest interest rate of 23.4%, therefore the budget surplus amount of $300 should be paid toward the credit card bill because it has the highest interest rate.
Inconclusion what he should with the $300 is: Pay it toward his credit card bill, because it has the highest interest rate.
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If correct will mark brainliest :)
The Federal Reserve has recently added new rules pertaining to Debit Cards. One of the new rules is that:
A. you need to be 21 to have a debit card.
B. overdraft protection is now mandatory for consumers.
C. overdraft protection is now the consumer's choice.
D. banks can no longer charge late fees on debit card accounts.
Answers
The Federal Reserve has recently added new rules pertaining to Debit Cards. One of the new rules is overdraft protection is now the consumer's choice.
Not all checking bills price a rate for overdraft safety transfers. But after they do, the price is normally considerably much less than paying an overdraft rate. It may also permit tests to clear, which in flip will let you keep away from lower back take a look at charges from merchants. It can offer get entry to finances in instances of emergency.
If a renter with overdraft safety writes an $800 take a look at on an account with a stability of $650, the overdraft safety from their related account kicks in as quickly because the take a look at is cashed—and the take a look at clears as opposed to bouncing because of inadequate finances.
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what is the short-run effect on output and the price level of the fed pursuing expansionary monetary policy?
Answers
Both will increase. Considering that the curve will shift to the right.
Short-term interest rates are lowered or the money supply is increased more quickly than usual as a result of expansionary monetary policy. It is implemented by central banks and accomplished through interest rate setting, reserve requirements, and open market activities.
When the benchmark federal funds rate or discount rate is lowered, the minimum reserves required of banks are lowered, or Treasury bonds are purchased on the open market, the U.S. Federal Reserve is implementing expansionary policies. An additional example of an expansionary monetary policy is quantitative easing, or QE.
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Which sequence of HACCP principles is in the correct order?
A.
Establish critical limits for each CCP, conduct a hazard analysis, and establish corrective actions.
B.
Conduct a hazard analysis, identify CCPs, and establish critical limits for each CCP.
C.
Establish record-keeping procedures, establish corrective actions, and establish CCP monitoring requirements.
D.
Establish CCP monitoring requirements, conduct a hazard analysis, and identify CCPs.
E.
Conduct a hazard analysis, identify CCPs, and establish CCP monitoring requirements.
Answers
Answer:
B
Explanation:
Hazard analysis of critical control point (HACCP) is a process of identifying and assessing risks alongside the biological , physical and chemical hazards associated with food production .
The sequence of the first three of the seven principles are
1. Conduct hazard analysis to determine potential risks related to food protection
2. Identify the critical control point (CCP) which addresses controlling identified hazards that are mostly likely to cause injury to health
3. Establishing critical limits for each CCP , which is the highest or lowest level a biological ,physical or chemical parameter must be controlled to prevent or minimize hazards.
Answer:
B. Conduct a hazard analysis, identify CCPs, and establish critical limits for each CCP
Explanation:
5 merit goods and their functions they serve for you
Answers
Answer:
A merit good is a good which when consumed provides external benefits, although these may not be fully recognised – hence the good is under-consumed. Examples include education and healthcare. As can be seen, when a merit good is consumed it generates positive externalities.
The market for merit goods is an example of an incomplete market. Merit goods have two basic characteristics: Firstly, unlike a private good, the net private benefit to the consumer is not fully recognised at the time of consumption.
Merit goods are included education, welfare services, health care, housing, refuse collection fire protection, and public parks.
What is Merit good?
In distinction to pristine public goods, merit goods could be, and are, delivered through the market, but not necessarily insufficient excesses to maximize social interest.
A merit good is good that when consumed supplies external benefits, although these may not be fully recognized.
Therefore, the good is under-consumed. Illustrations contain education and healthcare. As can be glimpsed, when merit good is consumed it provokes positive externalities.
The market for merit goods is an illustration of an insufficient market. Merit goods have two basic characteristics: Firstly, unlike a private good, the net private concession to the consumer is not completely recognized at the time of consumption.
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calculate the percentage by mass of all the components element in sodium trioxonitrate(v)
Answers
Sodium =27.05
Nitrogen=16.47
Oxygen=56.46
Wheb applying varnish ,always ___________the parts of the product
Answers
When applying varnish, always important to thoroughly clean and prepare the parts of the product to ensure a smooth and even finish.
This means removing any dust, dirt, or debris from the surface and ensuring that it is dry before applying the varnish. It is also important to sand the surface to create a smooth and even texture and remove any imperfections or rough spots. This will help the varnish to adhere properly to the surface and prevent any bubbles or bumps from forming during application.
In addition, it is important to apply the varnish in thin, even coats, allowing each layer to dry completely before applying the next. This will ensure that the finish is smooth and even, without any streaks or blotches. It may also be necessary to sand between coats to create a smooth surface and remove any imperfections.
Overall, the key to applying varnish is to take your time and ensure that you are properly preparing the surface and applying the varnish in a careful and controlled manner. With the right tools and techniques, you can achieve a beautiful and long-lasting finish that will protect and enhance your product for years to come.
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Assume the perspective of a consumer who only drinks coffee with milk added. (That is, coffee and milk are complements.) Holding other things constant, if the market price of coffee decreases, then the equilibrium price for milk will eventually rise. Describe the sequence of shifts to supply and/or demand curves and the corresponding changes in equilibrium prices and quantities that justify your answer.
Answers
Answer:
complement goods are goods that are consumed together. if the price of coffee falls, the quantity for demanded of coffee would rise. this is in line with the law of demand which says that the higher the price, the lower the quantity demanded and the lower the price the higher the quantity demanded. if the quantity demanded of coffee increases, the quantity demanded of milk would rise also. this would lead to an increase in equilibrium quantity of milk. the demand curve of milk will shift to the right while the supply curve would remain unchanged. this would lead to the demand outstripping the supply. when demand outstrips supply, equilibrium price would rise.
so an increase in the price of coffee would increase the equilibrium price and quantity of milk
Explanation:
Choose the answer.
This is one of the few languages that is accepted and supported by all major
browsers without the need for plug-ins or compilers. Choose the answer
A. PHP
B. CSS
C. JavaScript
Answers
C. Java script
I think srry if im wrong
arts stream padhne se aacha to python ya java ki book pdf download kar lo usse padh lo
Answers
Answer:
Hahahahahahahha is it that much difficult
Why do you think the 4 components of media measurement are important?
Answers
Answer:
audience, impression, frequency, and cost per thousand (CPM) 3.
Reach””The number or percent of different homes or persons exposed at least once to an advertising schedule in one or more media vehicles over a given period of time.
Frequency””The average number of times that the household or person is exposed to a media vehicle, schedule or campaign over a given time period.
Targaryen Corporation has a target capital structure of 75 percent common stock, 10 percent preferred stock, and 15 percent debt. Its cost of equity is 10 percent, the cost of preferred stock is 6 percent, and the pretax cost of debt is 7 percent. The relevant tax rate is 22 percent.
Answers
Answer:
a. 8.92%
b. 5.46%
Explanation:
a. What is the company’s WACC
b. What is the aftertax cost of debt?
a. After tax cost of debt = 7%*(1-tax rate)
=0.07*(1-0.22)
= 0.07 * 0.78
= 0.0546
= 5.46%
Thus, WACC =Respective costs*Respective weight
WACC = (0.75*10)+(0.1*6)+(0.15*5.46)
WACC = 8.919%
WACC = 8.92%
b. The After tax cost of debt from above is = 5.46%
mmm pizza bought $1,500 of equipment on account (i.e., on credit). what is the effect of recording this transaction on the company's total liabilities?
Answers
The effect of recording this transaction is an increase in the company's total liabilities by $1,500.
Recording the transaction where MMM Pizza bought $1,500 of equipment on account (credit) would have the following effect on the company's total liabilities:Increase in Liabilities: The transaction represents a purchase made on credit, which means MMM Pizza now has an outstanding liability to the equipment supplier. Therefore, the company's total liabilities would increase by $1,500 to reflect the amount owed for the equipment purchased.In summary, the effect of recording this transaction is an increase in the company's total liabilities by $1,500.
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Telling customers that they only have until midnight to get sale prices is an appeal to
A. ethos.
B. logos.
C. pathos.
D. kairos.
Answers
Answer:
D. kairos.
Explanation:
Telling customers that they only have until midnight to get sale prices is an appeal to kairos.
Answer:
It's d
Explanation:
Manchester United football club have an EPS of $32, and a net income of $50 million, and st a. 607,000 shares b. 18,503,000 shares c. 16,800,000,000 shares d. 1,562,000 shares
Answers
From the calculations, we can see that regardless of the given number of shares (a, b, c, or d), the resulting number of shares is approximately 1,562,500.
To determine the number of shares for Manchester United football club based on the given information, we can use the formula for earnings per share (EPS):
EPS = Net Income / Number of Shares
Given that the EPS is $32 and the net income is $50 million, we can rearrange the formula to solve for the number of shares:
Number of Shares = Net Income / EPS
a. Shares = $50,000,000 / $32 ≈ 1,562,500
b. For 18,503,000 shares:
Number of Shares = $50,000,000 / $32 ≈ 1,562,500
c. For 16,800,000,000 shares:Number of Shares = $50,000,000 / $32 ≈ 1,562,500
d. For 1,562,000 shares:
Number of Shares = $50,000,000 / $32 ≈ 1,562,500
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Dylan invested $7,200 in an account paying an interest rate of 2. 3% compounded quarterly. Assuming no deposits or withdrawals are made, how much money, to the nearest dollar, would be in the account after 12 years?.
Answers
The future value of the investment after 12 years will be $9,481.
What is future value?The future value of an investment is its value at a future date. It is obtained by multiplying the present value of an asset by its growth rate raised to the number of periods for the investment.
We can compute the future value of an asset with this model:
FV = PV(1+r)^n
where:
FV = future value
PV = present value
r = annual interest rate
n = number of periods interest held
We can also compute the future value by inputting the variables on an online financial calculator as follows:
Data and Calculations:Investment amount = $7,200
Compound interest rate = 2.3% quarterly
Period of investment = 12 years
N (# of periods) = 48 (12 x 4)
I/Y (Interest per year) = 2.3%
PV (Present Value) = $7,200
PMT (Periodic Payment) = $0
Results:
FV = $9,481.01
Total Interest $2,281.01
Thus, the future value of the investment after 12 years will be $9,481.
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In which career is it most important to exercise and take physical care of yourself?
A) therapist
B) child care provider
C) Interviewer
D) management
Answers
Answer: therapist
Explanation: i just took a test over this <3
in the investment - property purchase window, where can single or multiple closing costs be entered in?
Answers
Your greatest investment option for ventilation is casement windows. They practically funnel the breeze into the home like a small funnel.
A double-hung window is also a wise option for ventilation because hot air rises above cool air and enters via the bottom opening while leaving through the top. For fixed windows, the cost per square foot typically falls between Rs 200 and 550 and for casements, between Rs 250 and 700. The sliding design costs investment between Rs 280 and Rs 700 per square foot, while the combo style costs between Rs 340 and Rs 460. a secured investment contract, often between three and twelve months in the future, purchased with deposits.
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__ I can help protect clients’ confidential information.
A. Anti-virus software
B. Piracy
C. Identity theft
D. Licensing infringement
Answers
Answer:
a.
Explanation:
I think it’s a. Or anti-virus software because, it helps to prevent or try and help prevent someone from stealing your personal information.
Benson, incorporated manufactures a single product and uses the plantwide overhead rate method. the company's plantwide overhead rate is $25 per machine-hour (mh) used. their single product uses 10,000 mh, has direct material cost per unit of $10.96 and direct labor cost of $3.84 per unit. the total overhead cost is expected to be:
Answers
Benson Inc. employs the plantwide overhead rate technique and produces a single product. A total of $250,000 is anticipated for overhead expenses.
The sum of a company's indirect operating expenses is known as its total overhead costs. These expenses are required for the operation of the business even if they are not directly connected to the creation of a particular item or service. Rent, utilities, insurance, administrative salaries, and office supplies are a few examples of overhead expenses.
Total overhead cost = Predetermined overhead cost × Actual machine hours used
= $25 × 10,000
= $250,000
The direct materials and direct labor per unit will be used to compute the overall production cost per unit.
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a stock has an expected return of 13.2 percent and a beta of 1.40, and the expected return on the market is 10.10 percent. what must the risk-free rate be?
Answers
The risk-free rate be
Beta =
(13.2%-8.5%)/10%
=0.46
What is the risk free rate calculated?
The theoretical rate of return for an investment with no risk is known as the risk-free rate of return. The risk-free rate is the interest a potential investor may get over a certain time period from a completely risk-free investment.
By deducting the current inflation rate from the yield of the Treasury bond that corresponds to your investment length, you may determine the so-called "real" risk-free rate.
Theoretically, an investor expects the risk-free rate to be the minimal return on any investment since they won't take on extra risk unless the possible rate of return is higher. The investor's home market must be taken into account when determining a proxy for the risk-free rate of return in a particular circumstance, and negative interest rates might make things more difficult.
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Based on the W-2 provided, Social Security tax withheld for Lily was ______ of wages and Medicare tax withheld was ______ of wages.
a. 1.3%, 5.5%
b. 6.2%, 1.45%
c. 10%, 10%
d. 28%, 39.8%
Thanks for any help I can get! I don't need an explanation as to how you got the answer.
Answers
Answer:
b. 6.2%, 1.45%
Explanation:
Social security and medicare are calculated as a percentage of the gross pay. For Lily, gross pay is $14,450.
For social security, 895.90 is deducted. As a percentage of her gross pay
895.90 will be.
=895.90/ 14,450 x 100
= 0.06193771 x 100
=6.2 %
For medicare, 209.5 has been deducted. As a percentage of her gross pay, 209.5 is
=209.5/ 14,450 x 100
=0.01449827 x 100
=1.45%
The social security tax is the tax amount that is acquired from the earned income to fund the benefits of social security. It is the major part of the salary that carries the benefits for the person who earns it and contributes some part for the benefits of the government.
The correct answer is b. 6.2%, 1.45%
Social security and medicare are calculated as a percentage of the gross pay. For Lily, gross pay is $14,450.
For social security, 895.90 is deducted. As a percentage of her gross pay
895.90 will be.
\(=\frac{895.90}{14,450}\times 100= 0.06193771 \times 100=6.2 \%\)
For medicare, 209.5 has been deducted. As a percentage of her gross pay, 209.5 is
\(=\frac{209.5}{14,450} \times 100=0.01449827 \times 100=1.45\%\)
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Louis and Greg entered into an oral contract whereby Louis would transfer real estate he owned in Long Beach to Greg. In exchange, Greg agreed to pay $300,000.00 to Louis. Two days later, Louis received an offer from Ken to buy the real estate for $500,000.00 (the real fair market value). Louis then claimed that his contract with Greg was unenforceable since there was insufficient consideration by Greg and the contract had to be in writing. Which of the following is the best description of Louis's claim as to his contract with Greg?
A. The contract did not have consideration because $300,000.00 is unreasonable given the fair market value of the real estate and was obviously made by mistake.
B. The contract was void because it was not in writing.
C. The contract had consideration because Greg agreed to pay $300,000.00 for Louis's real estate and the contract had been fully performed because there was nothing left to be negotiated.
D. The contract did have consideration but was voidable as an oral contract because Louis had not fully performed.
Answers
Answer: The contract had consideration because Greg agreed to pay $100K for Louis's real estate and the contract had been fully performed
Explanation:
Please select the word from the list that best fits the definition Enjoy music in their free time
Answers
Answer:
Auditory Learners
Explanation:
I got it right on edge 2022.
Lee Ray bought 250 shares of a mutual fund with a NAV of $13.85. This fund also has a load charge of 7%.
a. What is the offer price? (Round your intermediate and final answer to the nearest cent.)
b. What did Lee pay for his investment? (Round your intermediate and final answer to the nearest cent.)
Answers
Answer: a. $14.9
b. $3725
Explanation:
a. What is the offer price?
This will be calculated as:
= NAV / (1 - load charge %)
= 13.85 / (1 - 7%)
= 13.85 / (1 - 0.07)
= 13.85 / (0.93)
= $14.9
B. What did Lee pay for his investment?
This will be:
= Number of shares bought × Offer price
= 250 × $14.9
= $3725
When something is grown and harvested in the same country it is distributed in, it can be considered what?
capital
international
duties
domestic
Answers
Answer:
domestic
Explanation:
In business, domestic refers to the home country of the producer or consumer. The domestic market is the market within the borders of the seller's country. Domestic contrasts with international, which refers to beyond the borders of a country.
Products that are produced and distributed within the country are domestic products. They are often referred to as local products. Domestic goods become exports if sold outside the borders of their country of origin.
A decrease in the real money supply, other things being equal, will shift the LM curve: A) downward and to the left. upward and to the left. C) B) downward and to the right. D) upward and to the right
Answers
A decrease in the real money supply, other things being equal, will shift the LM curve: B) upward and to the left. As a result, the LM curve shifts downward and to the left, indicating that the equilibrium interest rates have increased and output levels have decreased.
A decrease in the real money supply, other things being equal, will shift the LM curve downward and to the left. The LM curve represents the combinations of interest rates and output levels at which the money market is in equilibrium. A decrease in the real money supply means that there is less money available for investment and consumption, which increases the interest rates. This leads to a decrease in the demand for goods and services, which leads to a decrease in output levels.
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Can someone pls help ASAP pls
Answers
Choose a country or region that you would consider trading with that is not your home country or Canada. Prepare a country analysis for your chosen target (host) market. Be sure to include an analysis of the political, economical, technological systems and provide a risk evaluation. In the report, include legitimate sources i.e. UN, OECD, WTO, IMF etc. Use graphs and charts to support your analysis.
Answers
Japan is the world's third-largest economy, with a stable political system, advanced technology, and strong infrastructure. It is an attractive market for international trade and investment.
Japan is a constitutional monarchy with a parliamentary government. Its political system is stable, and it has strong diplomatic relationships with many countries, including the US, the EU, and Asian neighbors. Japan is a member of the WTO, OECD, UN, and other international organizations, which can facilitate trade agreements and cooperation. Japan has a highly developed, diversified, and competitive economy. It is the third-largest by nominal GDP (source: IMF), with major industries including automotive, electronics, and pharmaceuticalsa, also Japan has a strong consumer base and a high per capita income, offering opportunities for various consumer goods and services.
Japan is a global leader in technology and innovation. Its advanced infrastructure and focus on research and development (R&D) make it an attractive market for high-tech industries. The country is also actively investing in renewable energy, robotics, and artificial intelligence, opening opportunities for partnerships in these sectors.
The primary risks of trading with Japan include natural disasters (e.g., earthquakes, tsunamis), currency fluctuations, and an aging population. However, the government has implemented various measures to mitigate these risks, such as investing in disaster-resilient infrastructure and promoting innovation to address the aging population issue. In conclusion, Japan offers many opportunities for trade and investment due to its stable political environment, strong economy, and advanced technology. However, potential risks should be carefully considered and managed.
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In order to pool or share resources and know-how with a foreign company and subsequently share the rewards and risks of starting a new venture in a foreign country, an organization would pursue a?
Answers
To pool or share resources and know-how with a foreign company and subsequently share the rewards and risks of beginning a new venture in a foreign country, an organization would pursue a strategic alliance.
What is strategic alliance?A strategic alliance is an agreement between two businesses to work together on a project that will benefit both parties while maintaining their individual freedom. Compared to a joint venture, which involves two companies pooling resources to form a new business organisation, the arrangement is less intricate and legally enforceable. A strategic alliance is an agreement between two or more parties to work together to achieve a certain set of goals while still operating as independent businesses.
Strategic alliances are not a fix-all for every business and circumstance. However, through strategic alliances, businesses can strengthen their market position, enter new markets, add necessary talents, and split the cost and risk of large-scale development initiatives.
Hence, To pool or share resources and know-how with a foreign company and subsequently share the rewards and risks of beginning a new venture in a foreign country, an organization would pursue a strategic alliance.
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