Answer:
The amount requested of an item or service divided by the percentage change in price is the price elasticity of demand. The percentage change in quantity supplied divided by the percentage change in price represents the price elasticity of supply.
Explanation:
have a nice day!
Answer: I think it'd be B.
Explanation: I don't know for sure but it seems like it would be B.
Answer:
Cost of debt (Kd) = 6.1%
Cost of preferred stock = <u>Dividend paid</u>
Current market price
= $2.53
$33
= 0.0767 = 7.67%
Risk-free rate (Rf) = 2.2%
Beta (β) = 1.11
Market risk premium (Rm - Rf) = 6.7%
Cost of equity (Ke) = Rf +β(Rm - Rf)
Cost of equity (Ke) = 2.2 + 1.11(6.7)
Cost of equity (Ke) = 9.637%
WACC = Kd(D/V)(1-T) + Kp(P/V) + Ke(E/v)
WACC = 6.1(39 /100)(1 -0.35) + 7.67(11/100) + 9.637(50/100)
WACC = 1.55 + 0.84 + 4.82
WACC = 7.21%
Explanation:
In this case, cost of debt has been given. Cost of preferred stock is calculated as current dividend paid divided by current market price.
Cost of equity is calculated based on capital asset pricing model, which is Risk-free rate plus beta multiplied by the market risk premium.
WACC equals after-tax cost of debt multiplied by the proportion of debt in the capital structure plus cost of preferred stock multiplied by the proportion of preferred stock in the capital structure plus cost of equity multiplied by proportion of equity in the capital structure.
Answer:
7%
Explanation:
nominal interest rate = real interest rate + expected inflation rate
nominal interest rate = 5% + 2% = 7%
Usually the nominal interest rate has four major components:
- real interest rate: the net interest rate received by a lender or an investor
- inflation rate: the general rise in the prices of goods and services, as inflation increases, the purchasing power of a currency decreases
- liquidity risk premium: usually collateralized loans include a liquidity risk premium since not all assets can be easily converted to cash.
- credit risk: possibility of the borrower defaulting the loan
