Answer:
c. 11.02 percent
Explanation:
Weighted Average Cost of Capital (WACC) is the return that is required by the long term providers of Finance for the Business.
WACC = Ke × E/V + Kp × P/V + Kd × D/V
Where,
Ke = Cost of Equity
= 15.8 %
E/V = Market Weight of Equity
= 0.46
Kp = Cost of Preference Stock
= 8.3 %
P/V = Market Weight of Preference Stock
= 0.05
Kd = After tax Cost of Debt
= 6.8 %
D/V = Market Weight of Debt
= 0.49
Therefore,
WACC = 15.8 % × 0.46 + 8.3 % × 0.05 + 6.8 % × 0.49
= 11.015 or 11.02 %
Answer:
The total investment in P should be $405.40 which is further divided in X and Y as $243.24 and $162.16 respectively.
Explanation:
Expected return of risky portfolio is given as
E(P)=W(X)E(X)+W(Y)R(Y)
= 0.60*14% + 0.40*10 % = 12.40%
So the expected return of risky portfolio is 12.40%.
Let the investment in risky portfolio be p
(1-p)*5% + p*12.40% = 8%
Solving this gives
p = 0.4054*$1000=$405.4
So the amount to be added in the risky portfolio is $405.4. This is further divided in X and Y as follows
amount invested in X = 0.4054*0.60*1000 = $243.243
amount invested in Y 0.4054*0.40 * 1000 = $162.162
So the total investment in P should be $405.40 which is further divided in X and Y as $243.24 and $162.16 respectively.
Answer:
800,000/600,000=1.33
Profit percentage = 1.33-1=0.33=33%
0.02*800,000=16,000 worth of goods returned
Profit= 0.33*16,000=5280
COGS= 16,000-5280=10,720
Adjusting Entry
Debit Credit
Goods returned 10,720
Profit 5,280
Cash 16,000
Explanation:
Let the original price be x.
then,
x- 25% of x= 24
x- 25x/100 = 24
x- x/4=24
3x/4=24
3x= 96
x= 32
in short...the original price= 32 dollars