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yarga [219]
1 year ago
10

brutus co. exists in a world with taxes, but otherwise, capital markets are perfect. brutus co's debt cost of capital is 6%, its

equity cost of capital is 11%, its weighted average cost of capital is 5.8% and its tax rate is 25%. what's brutus co's leverage ratio? group of answer choices 40% 80% 20% 60%
Business
1 answer:
FinnZ [79.3K]1 year ago
5 0

Brutus co's leverage ratio is  40%

<h3>What leverage ratio?</h3>
  • 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. The WACC is the typical interest rate that a business anticipates paying to finance its assets.
  • The rate that a business is anticipated to charge on average to all of the holders of its securities in order to fund its

Cost of capital is 6%, its equity cost of capital is 11%, its weighted average cost of capital is 5.8% and its tax rate is 25%.

WACC = (5.8% x 25%) + (5.8% x 11% x 6%)

WACC = 3.973

WACC =   40%

Brutus co's leverage ratio is  40%

To learn more about WACC refer to:

brainly.com/question/25566972

#SPJ4

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A machine with a cost of $164,000, accumulated depreciation of $102,000, and current year depreciation expense of $25,500 is sol
Gre4nikov [31]

Answer:

$53,600

Explanation:

The computation of the cash flow from investing activities is shown below:

Cash flow from investing activities

Sale value of machinery $53,600

Net cash flow from investing activities $53,600

The current year depreciation expense is to be reported under operating activities and as we know that the investing activities record those activities which are held for purchased and sale of long term assets so the sale value fo machinery is only reported

4 0
3 years ago
tina is the sole owner of tina's lawn mowing, incorporated (TLM). In one year TLM collects $1,000,000 from customers to mow thei
Arisa [49]

Answer: See explanation

Explanation:

This is the remainder of the question:

How much does this economic activity contribute to GDP, NNP, National income, compensation of employees, Proprietors' Income, corporate profits, personal income, disposable personal income?

a. GDP – $1,000,000

The GDP is the value for the goods and services that a country sells. To loan customers lawns, Tina collects $1,000,000.

b. NNP – $875,000

NNP = GDP - Depreciation

= $1000000 - $125000

= $875000

c. National income – $875,000

d. Compensation of employees- $600,000

This is the amount paid by the company to its workers for work done as wages and salaries.

e. Proprietors’ income – $0

Because it is a Corporation, this will be $0.

f. Corporate profits – $275,000

This will be:

= $50,000 + $150,000 + $75000

= $275000

g. Personal income – $750,000

= NNP + Dividend - Profit

= $875000 + $150000 - $275000

= $750000

h. Disposable personal income – $550000

= $750000 - $60000 - $140000

= $550000

4 0
3 years ago
Assuming suppliers produce 75 lawnmowers per week:
Irina-Kira [14]

Answer:C

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6 0
3 years ago
Which of the following statements is normative? Group of answer choices Congress gives certain business corporations tax breaks.
fredd [130]

Answer: Congress gives too many tax breaks to corporations.

Explanation:

Normative statements are said to be statement of opinion and not fact.

Option D is therefore a normative statement because it is the opinion of the speaker that congress gives too many tax breaks because from a neutral standpoint, it cannot be said with certainty the number of tax breaks that will be considered too much.

The other options are statements of fact.

8 0
3 years ago
margo borrows $800, agreeing to pay it back with 5% annual interest after 7 months. how much interest will she pay?
Gala2k [10]

Answer:

23

Explanation:

800 * 5% * (7/12) = 23.333

dividing 7 by 12 coz there r 12 months in a year and she is paying for 7.

7 0
1 year ago
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