Answer:
The WACC before bond issuance is 3.9% and the WACC after bond issuance is 3.71%
Explanation:
In order to calculate the WACC before bond issuance
, we would have to calculate first the cost of equity using capital asset pricing model
.
So Using CAPM we have Rf + Beta x Market risk premium
=
0.5% + 0.85 * 4%
= 3.9%
. cost of equity
Therefore WACC before bond issuance = (Cost of equity x weight of equity + cost of debt (1-tax) x weight of debt)
= 3.9%
. WACC before bond issuance will be equal to cost of equity in this case as there is no debt issue.
In order to calculate the WACC after bond issuance we make the following calculation:
WACC after bond issuance = (Cost of equity x weight of equity + cost of debt (1-tax) x weight of debt)
= (3.9% x 0.9) + (2% x 0.1)
= 3.51% + 0.2%
= 3.71%
You want us to write it for you lol?
Answer:
Intrinsic value is $114.30
Explanation:
Given:
Dividend paid = $8
Required rate of return = 7% or 0.07
There is no growth in dividends.
Calculate price of preferred share using DDM as shown below:
Price of preferred share = Dividend paid ÷ Required rate of return
= 8 ÷ 0.07
= $114.28 or $114.3
Therefore, price of preferred share is $114.30
The marketing plan, which should include <em>specific plans</em> to deal with all opportunities and threats.
Answer:
The correct answers are:
1) "B": a common resource.
2) "A": excludable and rival.
Explanation:
1) A common resource is one that provides tangible benefits. This is the type of resource that can be used by several people at the same time without excluding the availability for its use to others. If they are not owned by anyone they take the name of open-access resources.
2) A good is excludable and rival if someone can prevent the use of it and when its use necessarily implies others not using it. Under this category fall all private resources since their ownership belongs to a certain number of people only if not only one.
