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Alexxx [7]
3 years ago
14

Mullineaux Corporation has a target capital structure of 64 percent common stock, 9 percent preferred stock, and 27 percent debt

. Its cost of equity is 12.9 percent, the cost of preferred stock is 5.9 percent, and the cost of debt is 7.6 percent. The relevant tax rate is 40 percent. What is Mullineaux�s WACC?
Business
1 answer:
nlexa [21]3 years ago
8 0

Answer:

10.02%

Explanation:

The computation of the WACC is shown below. The formula of WACC is shown below:

= (Weightage of debt × cost of debt)  + (Weightage of preferred stock) × (cost of preferred stock) + (Weightage of  common stock) × (cost of common stock)

= 27% × 7.6% × (1 - 0.40) + 9% × 5.9% + 64% × 12.9%

= 2.052% × (1 - 0.40) + 0.531% + 8.256%

= 10.02%

You might be interested in
Concord Corporation has a new product going on the market next year. The following data are projections for production and sales
kirza4 [7]

Answer:

$7.57

Explanation:

Return on investment (ROI) = Net profit/Investment = 14%

Net profit/$1,300,000 = 14%

Net profit = $1,300,000 × 14% = $182,000

Total costs = Variable costs + Fixed costs = $125,000 + $450,000 = $575,000

Total revenue = Total costs + Net profit = $575,000 + $182,000 = $757,000

Target selling price = Total revenue/Units produced and sold = $757,000/100,000 = $7.57

7 0
3 years ago
If Clancy's boss is interested in a graphical representation of the relationship between the price and quantity of televisions d
Anna35 [415]

Answer:

A demand schedule

Explanation:

A demand schedule is a table that shows how the quantity demanded varies with changes in prices. It is a table that explains the relationship between the price of a product or service and its demand. A demand schedule provides the same information as the demand curve. The only difference is that the demand curve uses graphical representation, while the demand schedule uses the table format.

Clancy should, therefore, prepare the demand schedule for her boss. It will give the same information regarding the relationship between price of televisions and the quantity demanded.

6 0
3 years ago
If the company budgets to need 4000 units to sell for a month, has a beginning inventory of 1000 units and a desired ending inve
Alecsey [184]

Answer:

5,500 units

Explanation:

The computation is shown below:

Given that

Need to sell the units in a month = 4,000 units

Beginning inventory = 1,000 units

Desired ending inventory = 2,500 units

So, by considering the above information, the units to be produced is

= Desired ending inventory + need to sell the units in a month - beginning inventory

= 2,500 units + 4,000 units - 1,000 units

= 5,500 units

5 0
3 years ago
Arjen owns investment A and 1 bond B. The total value of his holdings is 1,529 dollars. Investment A is expected to pay annual c
zloy xaker [14]

Answer:

In order to find the present value of the bond we have to calculate the present value of investment A and subtract is from 1529. We can find the present value of A by discounting all its cash flows.

As the first cash flow is received today and the last will be received 3 years form now there will be a total of 4 cash flows

1) 218.19 (Will not be discounted as we are receiving it today in the present)

2) 218.19/1.0987 (Discount by 1 year as cash will be received in 1 year)

3) 218.19/1.0987^2 (Discount by 2 years as cash will be received in 2 years)

4) 218.19/ 1.0987^3 (Discount by 3 years as cash will be received in 3 years)

= 218.19 + 198.58 + 180.74+ 164.51 = 762.02

PV of Bond = 1529-762.09= 766.91

Semi annual coupons mean 2 payments a year. Bond B matures in 23 years which means a total of 46 payments (23*2). N=46. A coupon rate of 6.4 percent means that the bond pays $64 (0.064*1000) each year. $64 divided by 2 is 32 which is the amount of each semi annual payment Arjen receives. Pv= 766.91 FV = 1000

In a financial calculator put

PV= -766.91

N= 46

FV=1000

PMT= 32

and compute I

I is 4.38 and we will multiply it by 2 because the payments are semi annual. So we will get an I of 8.76

YTM= 0.0876

Explanation:

5 0
3 years ago
How do you change your profile name on brainly?
sergejj [24]

Answer:

i don't think your able to...

6 0
3 years ago
Read 2 more answers
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