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Sindrei [870]
4 years ago
13

A company has a cost of debt (before tax) of 5.5% and a cost of equity of 12.8%. In addition, the company has a target capital s

tructure of 30% debt and 70% equity, and a marginal income tax rate of 30%. Given this information, what is the WACC for this company
Business
1 answer:
alexira [117]4 years ago
4 0

Answer:

10.12%

Explanation:

Wacc = (D / V)rd (1 - t) + (E / V) re

(D/V) = 0.3

Rd = before tax cost of debt = 5.5%

T = tax rate = 30%

(E / V) = 0.7

Re = marginal cost of equity = 12.8%

= (0.3 x 5.5% × 0.7) + (0.7 x 12.8%) = 1.155% + 8.96% = 10.12%

I hope my answer helps you

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Time value An Iowa state savings bond can be converted to ​$750 at maturity 5 years from purchase. If the state bonds are to be
Elden [556K]

Answer:

$78.35

Explanation:

Given:

Future value = $750

Maturity time = 5 years

Annual rate = 5%

Now,

Future value = P × ( 1 + r )ⁿ

Where, P is the present value of the bonds

r is the rate of interest

n is number of periods

on substituting the values, we get

$100 = P × ( 1 + 5% )⁵

or

$100 = P × ( 1.05 )⁵

or

P = $78.35

Hence, the state should sell its bond at a price of $78.35

4 0
3 years ago
Which of the following is not a physical surroundings factor influencing buying decisions? a. Time b. Sounds c. Scents d. Lighti
Tamiku [17]

Answer:

a. Time

Explanation:

Physical surroundings factor is a category of marketing situational influence . It involves visible things that play apart in influencing customers to either buy or not buy a good or a service. It includes scents, sounds (music played in a particular store) , lighting( the brighter, the better as it makes people to makes people decide practically)  and the weather (wetter months influences people to buy sweaters, umbrellas & jackets and on summer, people are more likely to buy bikinis, vests, sandals etc.).

7 0
4 years ago
econ One year a country has negative net exports. The next year it still has negative net exports and imports have risen more th
Vesnalui [34]

Answer:

its trade deficit rose

Explanation:

Trade deficit occurs when the imports of a country are higher than the exports. It is called the trade deficit. It means the country is importing more value of goods from other countries and exporting less. When Imports grows higher than the growth in exports, the trade deficit eventually rises.

8 0
3 years ago
Suppose Iron Handles manufactures cast iron skillets. One model is a​ 10-inch skillet that sells for $ 30. Iron Handles projects
tatuchka [14]

Answer:

The total amount budgeted for product costs for July is $10,875.

Explanation:

Consider the following formula to calculate the total amount budgeted.

Budgeted gross profit = Budgeted sales-budgeted cost of goods sold

= 725*$30 - $10,875 = $10,875.

3 0
3 years ago
What is the term that describes when two or more enterprises encounter each other in different regional markets, national market
snow_lady [41]

Answer:

Multipoint competition

Explanation:

Multipoint competition can be regarded as term used in describing a

process whereby there is engagement of a firm simultaneously in competitive interactions in a markets or across multiple products, resulting to competitive actions in a particular market leading to responses in a different/ multiple markets. Multipoint competition can also be explained as situation that exist when a firm is facing the same rival in different market. It should be noted that Multipoint competition is the term that describes when two or more enterprises encounter each other in different regional markets, national markets, or industries.

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