1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
alexgriva [62]
2 years ago
12

You were hired as a consultant to giambono company, whose target capital structure is 40% debt, 15% preferred, and 45% common eq

uity. the after-tax cost of debt is 6.00%, the cost of preferred is 7.50%, and the cost of retained earnings is 13.00%. the firm will not be issuing any new stock. what is its wacc?
Business
1 answer:
alexgriva [62]2 years ago
8 0

By definition, the Weighted Average Cost of Capital or WACC is the rate that an organization is expected to pay to all its security holders to finance its assets.

Mathematically this can be calculated by summation of the weighted average of the cost:

wacc = 0.4 * 0.06 + 0.15 * 0.075 + 0.45 * 0.13

wacc = 9.38%

You might be interested in
Consider two economic regions, region A and region B. If region A has strict union protection laws present, while region B lacks
Stolb23 [73]

Answer:

B. A higher unemployment rate

Explanation:

High union memership can increase unemployment in two ways:

  • Creating a barrier of entry because non-unionized workers can be barred from getting employed in industries with high union membership.
  • Pushing salaries above the marginal productivity of labor, especially the minimum wage, causing firms to hire less because hiring becomes more costly.

4 0
3 years ago
Cushenberry Corporation had the following transactions.1. Sold land (cost $11,360) for $14,200.2. Issued common stock at par for
miss Akunina [59]

Explanation:

The journal entries are shown below:

1. Cash A/c Dr $14,200

          To Gain on land A/c $2,840

          To Land $11,360

(Being the land is sold)

2. Cash A/c Dr $18,900

            To Common stock A/c $18,900

(Being the common stock is issued for cash)

3. Depreciation Expense A/c Dr $15,730

             To Accumulated Depreciation - Buildings A/c $15,730

(Being depreciation expense is recorded)

4. Salaries expense A/c Dr $8,080

                 To Cash A/c $8,080

(Being the salaries expense is paid for cash)

5. Equipment A/c Dr $8,420

              To Common stock A/c $1,170

              To Additional paid-in capital in excess of par value A/c $7,250

(Being the equipment is purchased)

6. Cash A/c Dr $1,236

Accumulated depreciation - Equipment A/c Dr $7,210

Loss on sale of equipment A/c Dr $1,854

                   To Equipment A/c $10,300

(Being the equipment is sold)

7 0
3 years ago
Your savings account is currently worth $1,200. The account pays 5 percent interest compounded annually. How much will your acco
Flura [38]

Answer:

$2,010  

Explanation:

The future value of the savings account in 6 years can be computed using the below future value formula:

FV=PV*(1+r)^n

FV=unknown future amount

PV=current worth of the savings account=$1,200

r=annual interest rate=5%

n=number of years envisaged=6

FV=$1,500*(1+5%)^6

FV=$1,500*(1.05)^6

FV=$1,500*1.3400956  

FV=$2,010  

7 0
3 years ago
Grape Corporation purchased a machine in December of the current year. This was the only asset purchased during the current year
Elden [556K]

Answer:

d. In the following year using a half-year convention

Explanation:

Since the mechine will only be in service in January of the following year, The corporation cost recovery should begin in the following year using a half year convention.

6 0
2 years ago
Topik is a product that is sprayed on thinning hair and makes the hair appear thicker. The manufacturer considers its potential
Alik [6]

Answer:

(C) target market

Explanation:

The group of people for which a product is designed and aimed to is the product's target market. In this case, Topik is a product that aims to sell to blue-collar workers who earn less than $30,000 per year, are divorced, and who like to think of themselves as weekend athletes, which is the product's target market.

The answer is (C).

4 0
3 years ago
Other questions:
  • e competitive equilibrium rent in the city of Lowell is currently​ $1,000 per month. The government decides to enact rent contro
    9·1 answer
  • Which job would require a license or certification? ambassador lobbyist high school teacher state senator
    13·2 answers
  • You have a chance to buy an annuity that pays $550 at the beginning of each year for 3 years. You could earn 5.5% on your money
    8·1 answer
  • Alfred, a software programmer at Gamma Inc., develops a program that spreads Trojan viruses to the organization’s network. When
    6·1 answer
  • Which activity is done in Step 2 of comparison shopping?
    14·1 answer
  • Seven essential elements of an effective Compliance Program include:
    9·1 answer
  • If all you knew about a production system was that total daily output was 400 units and the total labor necessary to produce the
    11·1 answer
  • Transactions that affect earnings do not necessarily affect cash. Identify the effect, if any, that each of the following transa
    9·1 answer
  • In formal writing, you _____________ ____________ use abbreviations. Should never should always almost never almost always Forma
    6·1 answer
  • If a company can use 100% of its
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!