target debt-equity ratio of .40. Its cost of equity is 11.8 percent and its cost of debt is 6.5 percent. If the tax rate is 21 percent, what is the company’s WACC?

Answers

Answer 1

Answer:

9.90%

Explanation:

Debt-equity=debt/equity=0.40( debt=0.40 while equity is  1 since 0.40/1=0.40)

weight of debt=0.40/(0.40+1)=28.57%

weight of equity=1/(0.40+1)=71.43%

cost of equity=11.80%

cost of debt=6.50%

tax rate=21%

WACC=(weight of equity*cost of equity)+(weight of debt*cost of debt)*(1-tax rate)

WACC=(71.43% *11.80%)+(28.57%*6.50%)*(1-21%)

WACC=9.90%


Related Questions

Why is questioning such an important leadership skill?
A. Questioning shows the leader's interest in the people and in the project.
B. Questioning uncovers many mistakes and errors.
C. Questioning is a good way for the leader to stay in command.
D. Questioning is easier than facilitating meetings.

I know it’s not B I got it wrong.

Answers

Answer:

A. Questioning shows the leader's interest in the people and in the project.

Explanation:

Questioning shows the leader's interest in the people and in the project is an important leadership skill.

What are leadership skills ?

The qualities and talents that people possess that enable them to manage operations, direct initiatives, and direct their teams toward the accomplishment of objectives are known as leadership capabilities.

In order for CEOs to effectively allocate resources to fulfill the mission and goals of their firm and make meaningful decisions regarding those decisions, they must possess strong leadership qualities. The capacity for delegation, inspiration, and good communication are all important leadership traits. Honesty, assurance, dedication, and innovation are further qualities of a leader.

People follow an effective leader. An effective leader may assist team members in achieving their professional objectives by providing them with knowledge, resources, training, and opportunities for growth. The trust of a team's members can be gained by a leader through empathy and concern.

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The length of time a firm must wait to recoup the money it has invested in a project is called the:

Answers

Answer: payback period

Explanation:

The length of time a firm must wait to recoup the money it has invested in a project is called the payback period.

The payback period is the time taken for an investor to make back the amount that the investor invested in a particular investment. It should be noted that investment with shorter payback period are typically more attractive to investors as they can recoup their money quickly.

true or false Deflation can be differentiated from disinflation in that the deflation rate is always negative while the disinflation rate is always positive.

Answers

Answer:

True

Explanation:

The deflation arise when there is a decline in the general level of the price in the overall economy. It could be said as a negative rate of inflation

On the other hand, the disinflation arise when the inflation rate is the decline over time but it would remain positive

Therefore the given statement is true

hence, the same is to be considered

"is expected to grow at a constant rate of 5.00 percent. If the company’s next dividend, which will be paid in a year, is $1.68 and its current stock price is $22.35, what is the required rate of return on this stock?

Answers

Answer:

r = 0.12516 or 12.516% rounded off to 12.52%

Explanation:

Using the constant growth model of dividend discount model, we can calculate the price of the stock today. The DDM values a stock based on the present value of the expected future dividends from the stock. The formula for price today under this model is,

P0 = D1 / (r - g)

Where,

D1 is dividend expected for the next period /year g is the growth rate r is the required rate of return or cost of equity

Plugging in  the values for P0, D1 and g in the formula, we can calculate the r to be,

22.35 = 1.68 / (r - 0.05)

22.35 * (r - 0.05) = 1.68

22.35r - 1.1175 = 1.68

22.35r = 1.68 + 1.1175

r = 2.7975 / 22.35

r = 0.12516 or 12.516% rounded off to 12.52%

A non-dividend-paying stock is currently priced at $33.15. The risk-free rate is 4.4 percent and a futures contract on the stock matures in three months. What price should the futures be

Answers

Answer:

The price of the futures should be $33.52.

Explanation:

The future price can be calculated using the formula for calculating the future value (FV) as follows:

FV = PV * (1 + r)^n ......................... (1)

Where;

FV = future value or future price = ?

PV = Present value or current price = $33.15

r = monthly risk-free rate = 4.4% / 12 = 0.044 / 12 = 0.00366666666666667

n = number of months = 3

Substituting the values into equation (1), we have:

FV = $33.15 * (1 + 0.00366666666666667)^3

FV = $33.15 * 1.01104038262963

FV = $33.5159886841722

Approximating to 2 decimal places, we have:

FV = $33.52

Therefore, the price of the futures should be $33.52.

Floyd Industries stock has a beta of 1.20. The company just paid a dividend of $.50, and the dividends are expected to grow at 6 percent per year. The expected return on the market is 11 percent, and Treasury bills are yielding 5.9 percent. The most recent stock price for the company is $76.

Required:
a. Calculate the cost of equity using the DDM method.
b. Calculate the cost of equity using the SML method.

Answers

Answer:

a.

r = 0.06697 or 6.697% rounded off to 6.70%

b.

r = 0.1202 or 12.02%

Explanation:

a.

Using the constant growth model of dividend discount model, we can calculate the price of the stock today. The DDM values a stock based on the present value of the expected future dividends from the stock. The formula for price today under this model is,

P0 = D0 * (1+g) / (r - g)

Where,

D0 * (1+g) is dividend expected for the next period /year g is the growth rate r is the required rate of return or cost of equity

Plugging in the values for P0, D0 and g in the formula, we can calculate the value of r to be,

76 = 0.5 * (1+0.06) / (r - 0.06)

76 * (r - 0.06) = 0.53

76r - 4.56 = 0.53

76r = 0.53 + 4.56

r = 5.09 / 76

r = 0.06697 or 6.697% rounded off to 6.70%

.

Using the CAPM, we can calculate the required/expected rate of return on a stock. This is the minimum return required by the investors to invest in a stock based on its systematic risk, the market's risk premium and the risk free rate.  

The formula for required rate of return under CAPM is,

r = rRF + Beta * (rM - rRF)

Where,

rRF is the risk free rate

rM is the market return

r = 0.059 + 1.2 * (0.11 - 0.059)

r = 0.1202 or 12.02%

In the dominant firm model of oligopoly, the dominant firm maximizes profits by producing at the point where:_____________.

Answers

Answer:

The marginal revenue is equal to its marginal cost

Explanation:

In the case of the model of a dominant firm with respect to the oligopoly, the firm i.e. dominant could maximize its profits by generating at the point where the marginal revenue is equivalent to the marginal cost

i.e.

Marginal revenue = Marginal cost

At this point, the firm could maximized its profits

Hence, the same is to be considered

Tinsel Co.'s balances in allowance for uncollectible accounts were $70,000 at the beginning of the current year and $55,000 at year end. During the year, receivables of $35,000 were written off as uncollectible. What amount should Tinsel report as uncollectible accounts expense at year end

Answers

Answer:

$20,000

Explanation:

to determine the amount that Tinsel should report as bad debt expense (or uncollectible accounts expense), we must start with the beginning balance of allowance for doubtful accounts, and then we must subtract the account's ending balance and any bad debts write offs recorded during the year:

beginning account balance   $70,000

- ending account balance     ($50,000)

- write offs                              ($35,000)

total                                        ($20,000)

g raj drives his own car on company business. his own company reimburses him at the rate of 42 cents per mile. raj estimates that his fixed costs per year such as taxes, insurance, and depreciation are $2025. the variable costs such as gas, oil, and maintenance are about 13.3 cents per mile. how many miles must raj drive to break even

Answers

Answer:

He must drive 7,055.75 miles to break even.

Explanation:

To calculate the number of miles to drive to break-even, we need to use the following break-even point formula:

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 2,025 / (0.42 - 0.133)

Break-even point in units= 2,025 / 0.287

Break-even point in units= 7,055.75

He must drive 7,055.75 miles to break even.

The Cobb-Douglas production function for a particular product is N(x,y) = 80x0.7y0.3, where x is the number of units of labor and y is the number of units of capital required to produce N(x, y) units of the product. Each unit of labor costs $40 and each unit of capital costs $120. If $800,000 is budgeted for production of the product, determine how that amount should be allocated to maximize production. Production will be maximized when using _______ units of labor and _________ units of capital.

Answers

Answe

մայրիկ

Explanation:

մայրիկmj մայրիկtr մայրիկ մայujk

What is the approximate market value of a $1,000 corporate bond that pays 8 percent interest when comparable bonds are paying 8 percent interest?A. $800B. $900C. $1000D. $1125E. $1625

Answers

Answer:

C. $1000

Explanation:

The computation of the approximate market value is shown below:

Current yield = Annual coupon payment ÷ market value

8% = ($1,000 × 8%) ÷ market value

8% = $80 ÷ market value

So, the market value is

= $80 ÷ 0.08

= $1,000

Hence, the approximate market value is $1,000

Therefore the correct option is c.

We simply applied the above formula so that the correct value could come

And, the same is to be considered

planned investment remains unchanged as the interest rate changes, the size of the government spending multiplier will be

Answers

Answer: Multiplier effect= Change in real GDP ÷ Change in injection

Explanation:

When there is an extra spending by firms on especially workers welfare, it rubs off on the society because this workers would now spend more down to the markets and it affects traders out their and affects the GDP.

Multiplier effect= Change in real GDP ÷ Change in injection

On October 1, 2020, Mertag Company (a U.S.-based company) receives an order from a customer in Poland to deliver goods on January 31, 2021, for a price of 1,000,000 Polish zlotys (PLN). Mertag enters into a forward contract on October 1, 2020, to sell PLN 1,000,000 in four months (on January 31, 2021). U.S. dollar–Polish zloty exchange rates are as follows:



Date Spot Rate Forward Rate
(to January 31, 2021)
October 1, 2020 $ 0.25 $ 0.29
December 31, 2020 0.28 0.31
January 31, 2021 0.30 N/A


Mertag designates the forward contract as a fair value hedge of a foreign currency firm commitment. The fair value of the firm commitment is measured by referring to changes in the forward rate, and, therefore, forward points are included in assessing hedge effectiveness. Mertag must close its books and prepare financial statements on December 31. Discounting to present value can be ignored.



Prepare journal entries for the foreign currency forward contract, foreign currency firm commitment, and export sale.
Determine the net benefit, if any, realized by Mertag from entering into the forward contract.

Answers

Answer: JANUARYYYYYYYYYYYYYYYYYYY

Explanation:

Mertag enters into a forward contract on October 1, 2020, to sell PLN 1,000,000 in four months SO IT WILL BE JANUARYYYY

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Belle Corp. has a selling price of $56 per unit, variable costs of $46 per unit, and fixed costs of $77,000. What sales revenue is needed to break-even

Answers

Answer:

Break-even point (dollars)= $431,200

Explanation:

Giving the following information:

Selling price= $56 per unit

Unitary variable costs= $46

Fixed costs= $77,000

To calculate the break-even point in sales, we need to use the following formula:

Break-even point (dollars)= fixed costs/ contribution margin ratio

Break-even point (dollars)= 77,000 / [(56 - 46) / 56]

Break-even point (dollars)= $431,200

You are the CFO of a regional manufacturing firm. They need to raise more capital for an expansion project. You have been asked to talk with regional banks to secure a loan. Your firm has a Current Ratio of 1.0, a Quick Ratio of 0.5, and a TIE ratio of 1.3.

Required:
What would you tell the firm's management about your chances of securing a loan with preferentially low interest rates?

Answers

Answer:

(C) tell management that the company has borderline risk and they will likely need to pay an interest level at or slightly above the average interest rate for their region

Explanation:

As it can be seen that the quick ratio is lower, the current ratio is average and the times interest ratio is lower. The time interest ratio should be more as if the company earnings is high so it able to cover its interest expense

Therefore the company is in the borderline risk due to which the company has to pay the high interest rate

Hence, the correct option is c.

[Maggie] called her insurance agent after estimating the damages. She had already spent $2,000 on pumping out the water and repairing the hot water heater, which had corroded in places. The agent was polite. He had been getting hundreds of similar calls... “Ma’am, I’m sorry, but according to our records, you do not have flood insurance protections in your policy.” What will most likely happen to Maggie? Check all that apply. She may have to pay thousands of dollars to repair and replace her possessions. She will convince the insurance company that she has flood coverage. Her insurance company will eventually pay the damages. She may have to pay to live somewhere else while repairs are being made. She may have to go into debt.

Answers

Answer:

A,D,E

Explanation:

Took on Edgen2021

Answer:

Explanation:

its B, D, and E

On January 1, 2022 Crystal Company granted restricted stock units (RSUs) representing 32.5 million of its $1 par common shares to executives, subject to forfeiture if employment is terminated within five years. After the recipients of the RSUs satisfy the vesting requirement, the company will distribute the shares. The common shares had a market price of $7.0 per share on the grant date.

Required:
a. Determine the total compensation cost pertaining to the RSUs.
b. Prepare the appropriate journal entry to record the award of RSL's on January 1, 2021.
c. Prepare the appropriate journal entry to record compensation expense on December 31, 2021.
d. Prepare the appropriate journal entry to record compensation expense on December 31, 2022.
e. Prepare the appropriate journal entry to record compensation expense on December 31, 2023.
f. Prepare the appropriate journal entry to record the lifting of restrictions on the RSL's and issuing shares at December 31, 2023.

Answers

Answer:

a. Total compensation = $32,500,000 * $7.0 = $227,500,000

b. No Journal entry to award of award of RSL's on January 1, 2021.

c. Date         Account titles                             Debit              Credit

21-12-2021   Compensation Expenses    $45,500,000

                    ($227,500,000/5)

                            Paid in capital - Restricted stock         $45,500,000

d. Date         Account titles                             Debit              Credit

21-12-2022   Compensation Expenses    $45,500,000

                    ($227,500,000/5)

                            Paid in capital - Restricted stock         $45,500,000

e. Date         Account titles                             Debit              Credit

21-12-2023   Compensation Expenses    $45,500,000

                    ($227,500,000/5)

                            Paid in capital  - Restricted stock         $45,500,000

f. Date         Account titles                                      Debit              Credit

21-12-2023  Paid in capital - Restricted stock $227,500,000

                        Common stock ($32,500,000 * 1)                  $32,500,000

                         Paid in capital - Excess of par balance         $195,000,000

Evaluating your results is important because it helps you to ________. a. Prevent future problems from occurring b. Implement your solution more efficiently c. Identify possible causes of the problem d. All of the above Please select the best answer from the choices provided A B C D

Answers

Answer:

its D: all of the above

Explanation:

Evaluating the results is important because it helps us to prevent future problems from occurring, Implement your solution more efficiently, Identify possible causes of the problem or all of the above. Thus option (D) is correct.

What are problems?

Problems are situations or conditions that are perceived as undesirable or difficult to overcome, and that require some kind of action or solution in order to be resolved. Problems can arise in various areas of life, such as personal relationships, work, health, finance, or politics.

Identifying and addressing the problems is an important part of problem-solving, decision-making, and critical thinking, and can lead to positive outcomes and personal growth.

The evaluation of the  results is important because it helps us in many ways, as I said above. Therefore, option (D) is correct.

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One-year Treasury securities yield 4.25%. The market anticipates that 1 year from now, 1-year Treasury securities will yield 6.9%. If the pure expectations theory is correct, what is the yield today for 2-year Treasury securities? Calculate the yield using a geometric average.

Answers

Answer:

5.57%

Explanation:

Assuming that pure expectation theory holds, then the compounded returns of 1 year treasury security rate multiplied by the compounded return of 1 year security rate 1 year from now is equal to the compounded return of the 2 year treasury rate.

1 year treasury security rate = 4.25%

1 year treasury security rate 1 year from now = 6.9%

To solve, we have

1.0425 * 1.069 = (1 + x)²

1.1144 = (1 + x)², finding the square root of both sides

√1.1144 = 1 + x

1.0557 = 1 + x

x = 1.0557 - 1

x = 0.0557

Therefore, the yield today for 2 year treasury securities is 5.57%

How is owner’s equity affected when services are sold on account?

Answers

Answer:

Effect on owner’s equity affected when services are sold on account is:

Owner's equity increase (except when credit risk is incurred).

Explanation:

No matter the mode of sales, the owner's equity increases when services are sold.  This implies that whether services are sold on account or for cash, the owner's equity will increase through the Retained Earnings.  However, when credit loss arises from credit defaults, then the owner's equity will reduce.  This is why a business must review the credit-worthiness of its customers before granting credit terms.  Credit defaults are common in business and remain part of the business risk.

The federal government creates the federal budget each year in order to
Please help and don't put a random answer. Multiple Choices is in the screen shot.

Answers

Answer:

c. decide how much money the government will spend

Explanation:

A budget is a plan on how a person, company, or government intends to spend its projected income.  A federal budget shows the money that a government's departments and agencies intend to spend in the financial year under consideration. A federal budget is a plan of expenditure vis a vis projected income.

If the planned expenditure exceeds forecasted income, the federal budget is said to have a deficit. Should the expenditure be less than the projected income, the budget will have a surplus.

Answer:c

Explanation:

For firms competing in worldwide markets, conducting __________________ is more complex, since what works in one country or region might not work in another.

Answers

Answer:

Environmental analysis

The goal is a fast delivery process, ideally requiring little manual effort. What is one capability used to achieve this?

a. Soft launches
b. Nonfunctional requirements
c. Quiet releases
d. Feature toggles

Answers

Answer: D. Feature toggles

Explanation:

Feature toggles allows one to be able to either turn a code on or off without needing a deploy.

Feature toggles being about a fast delivery process, ideally requiring little manual effort.

Feature toggles are usually used by engineering teams for continuous deployment and canary releases.

Term that express the capability which involves a goal of having a fast delivery process, with a little manual effort required is D: Feature toggles.

When one is trying to acheive a goal of having a fast delivery process, Feature toggles would be the best option to go for Feature toggle can be regarded as a mechanism that helps the code to be turned “on” or “off”.

Thus can be done remotely, and there is no need for deploy, it is been utilized by  product engineering and software development.

Therefore, option D is correct

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A cash budget:______.A. Would be as useful to a business which makes sales only on a credit basis, as it is to a business making sales for cash. B. Should include labor, material, and overhead variances. C. Should ignore any projected balances of a negative amount of cash. D. Should not include payments for noncontrollable elements of factory overhead.

Answers

Answer:

A. Would be as useful to a business which makes sales only on a credit basis, as it is to a business making sales for cash.

Explanation:

A cash budget shows the cash flow for a business over a certain time period in which the budget determines if the business has enough cash to operate.

Integration is summation operation performed on discrete random variables.
No
Yes
None of the options
Both A and B

Answers

Answer:

Yes

Explanation:

In simple words, An integral assigns numbers to functions in mathematics in such a manner that can explain movement, region, density, as well as other definitions that emerge from the combination of extremely small data. Integration is among the two primary calculus operational activities; the other one is its greater operating, separation.

Thus, the given statement is true.

Kindly help me asap!!!!! Please please please please

Answers

No this does not violate the expenditure = output identity.

White Company's assets total $780,000 and its owners' equity consists of capital stock of $500,000 and retained earnings of $150,000. Determine the Company's total amount of outstanding liabilities.

Answers

Answer:

$130,000

Explanation:

With regards to the above information, recall that;

Assets = Liabilities + Retained earnings.

Equity consist of Capital stock + Retained earnings

Given that;

Assets = $780,000

Liabilities ?

Capital stock = $500,000

Retained earnings = $150,000

Therefore,

$780,000 = Liabilities + $500,000 + $150,000

Liabilities = $780,000 - $500,000 - $150,000

Liabilities = $130,000

White company's total amount of outstanding liabilities is $130,000

Based on the total assets and the total equity, the outstanding liabilities can be calculated to be $130,000

The accounting equation is:

Assets = Equity + Liabilities

Equity includes both capital stock and retained earnings.

Liabilities here are therefore:

780,000 = (500,000 + 150,000) + Liabilities

Liabilities = 780,000 - 650,000

= $130,000

In conclusion, liabilities are $130,000

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An employer calculates the amount of income tax withheld from salary or wages based on the information an employee provides on the:

Answers

Answer:

C Form W-4

Explanation:

The form W-4 is a form that represents the witholding certificate of the employee. In the case when the form is completed in a correct way so this shows that the money could be withhold from the paycheck for the purpose of the federal income taxes

So as per the given situation, the amount that is calculated for the purpose of withheld from the salary is the form W-4

hence, the same is to be considered

Concord Corporation produces 5000 units of part A12E. The following costs were incurred for that level of production: Direct materials $60000 Direct labor 165000 Variable overhead 80000 Fixed overhead 175000 If Concord buys the part from an outside supplier, $25000 of the fixed overhead is avoidable. If the outside supplier offers a unit price of $68, net income will increase (decrease) by:______.a. $15,000.b. $85,000.c. $130,000.d. $35,000.

Answers

Answer:

b. $85,000

Explanation:

First, we should prepare the analysis of cost savings if the company buys outside.

Analysis of cost and savings

Purchase (5,000 units × $68) = ($340,000)

Savings

Variable cost = $80,000

Fixed cost = $175,000

Net income effect

($85,000)

The effect is a decrease in net income by $85,000.

PLEASE HELP!!! Compare U.S. government savings bonds to mutual funds and collectibles in terms of risk and potential return. Explain why these investments are categorized as they are.

Answers

Answer:

.......

Explanation:

...................

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