Answer:
weighted-average cost of capital is 11.57 %
Explanation:
Weighted Average Cost of Capital (WACC) is the return that is required by providers of long term permanent sources of capital.
WACC = Weight of Equity × Cost of Equity + Weight of Debt × After tax cost of debt.
where,
After tax cost of debt = interest × ( 1 - tax rate)
= 8% × (1 - 0.35)
= 5.20 %
Therefore,
WACC = 0.65 × 15% + 0.35 × 5.20 %
= 11.57 %
Answer:
0.8%
Explanation:
Calculation to determine what percent of the adjusted portfolio would need to be invested in T-Bills
Using this formula
M2 =(Rp - Rf) * σ m / σ p - (Rm - Rf)
Whrere,
Rp represent Return on Seminole Fund (14%)
Rf represent Risk free rate of return(6%)
Rm represent Return on Market Portfolio(18%),
σ m represent Standard Deviation of return on market portfolio (22%)
σ p represent Standard Deviation of return on fund (30%)
Let plug in the formula
M2= (18 - 6) * 22 / 30 - (14 - 6)
M2= (12 * 0.73 ) - 8
M2= 8.8 - 8
M2= 0.8%
Therefore the percent of the adjusted portfolio that would need to be invested in T-Bills is 0.8%
Answer:
The price of a bond is $492.24
Explanation:
F= face value of bond = $1000
T=time to maturity of bond = 2044-2017= 27 years
r=yield to maturity=2.66% semi-annulay=0.0266
Formula to calculate price= F/(1+r)∧T
we have = 1000/(1+.0266)∧27 = 1000/2.0315 = $492.24
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Answer:
Short-run economics primarily affect price.
Explanation:
When demand decreases for any reason, prices go down in the short term. When demand spikes, prices go up. ... Long-run adjustments occur when sustained increases or decreases in demand cause a business to change its practices and can affect both price and the means of production.
