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viktelen [127]
2 years ago
15

justify your answer by explaining how the weighted average cost of capital for the company would change if clark uses bank debt

to finance all or a portion of the building purchase.
Business
1 answer:
DochEvi [55]2 years ago
4 0

Justify your response by describing how using bank debt to finance all or part of the building purchase would affect the company's weighted average cost of capital.

What is WACC?

The weighted average cost of capital (WACC), which includes common stock, preferred stock, bonds, and other types of debt, is the average after-tax cost of capital for a company. WACC is the typical interest rate a business anticipates paying to finance its assets. Because it expresses the return that both bondholders and shareholders require in order to provide the company with capital in a single value, the weighted average cost of capital is a popular method for calculating the required rate of return.

She mostly used her own money to launch the company, demonstrating that she started with equity rather than debt. She isn't starting out with a lot of debt, therefore the needed rate of return would be below the average. She may now concentrate on growing the business rather than making ongoing debt payments. Due to decreased investment, the total rate of return ought should be lower. To be able to market what they produce, all they truly needed was indeed a retail location. This was not there in their prior store facility, which doubled as their kitchen.

Because they truly lack any debt to begin with, Clark can utilize some bank debt. She can then experience failing(defaulting) on the loan she obtained. This would be primarily caused by her not having enough money to be able to pay down the debt effectively

To learn more about WACC, click on the link below –

brainly.com/question/28042295

#SPJ4

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Hidden Valley Communications, Inc., located in a remote area of Utah, made a special device that was used in 4th generation cell
Cerrena [4.2K]

Answer: Leveraged buyout

Explanation:

leveraged buyout is a system of business concept that describes an acquisition of a company done by debts. Where a company acquires another through borrowing money to match the cost of the company being bought. Company assets are often used as loan for collateral in this case and they are often used to trade the profit of many private equity firms.

This is what the employees at Hidden Valley Communications, Inc. did.

4 0
2 years ago
When writing a check, you complete all of these steps except for _____.
drek231 [11]

Answer:

SIGNING THE BACK OF THE CHECK

6 0
2 years ago
1. Read the following scenario and answer the question in 5-10 sentences. You are an expert in the field of advanced laser techn
Greeley [361]

The possible management structures and key terms of any operating agreement that must be considered to form an LLC are related to responsibility sharing, as an LLC is a type of entity owned by its partners.

Some features of the LLC are:

  • Less formality.
  • Tax savings.
  • Flexible management.
  • Simple organizational structure.

Therefore, the LLC is a single hybrid entity, more streamlined than a corporation, with the advantage that this proprietorship has limited liability protection.

Management is also more flexible, with decision-making being possible to be shared among its members, regardless of hierarchy.

It is also important to highlight the taxes, as in an LLC the taxation is simpler, with the losses and gains being reported in the tax returns, which helps to offset the income.

So this is a more streamlined and protected form of partnership that can be managed by a group of members more securely than a corporation.

It has less formal requirements to exist, and in case of bankruptcy or debt, there is greater protection for each member's personal property, as in an LLC the debts and obligations cannot be greater than the initial capital invested in the company.

Learn more here:

brainly.com/question/18567855

3 0
2 years ago
1.A bank loaned Darden Company $10,000 on a 1-year, 6% note, but deducted the interest in advance. The journal entry made by Dar
Sedaia [141]

Answer:

The correct answer is option (a).

Explanation:

According to the scenario, the computation of the given data are as follows:

Amount = $10,000

Interest rate = 6%

So total interest amount = $10,000 × 6% = $600

So, the cash amount = $10,000 - $600 = $9,400

So, it shows increase in cash for $9,400.

The journal entry for the given data are as follows:

Cash A/c Dr $9,400

Interest A/c Dr $600

To Notes payable A/c $10,000

(Being the Notes payable is recorded))

7 0
2 years ago
On september i5, preet wrote to lila as follows: "i offer to sell you blackacre for $300,000, all cash, closing on november i. P
Gnesinka [82]

Answer:

The contract wasn't formed because of closing of offer due to closing of offeree.

Explanation:

The offeree can only accept the offer if:

1. The Offer is not closed.

2. The offerer is alive.

3. No offerer qualifies age limit.

4. The Offered is in senses which means he is not drunk or suffering from mental illness that affects thinking of what is right or wrong for him.

Clearly from the above conditions the condition 2 is not satisfied here because offerer died before the acceptance of offer. Hence the contract was not formed and Executor did right by refusing to deliver the deed to black-acre in exchange for money.

8 0
2 years ago
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