Answer:
11%
Explanation:
Nominal interest rate = real interest rate + inflation rate
6% + 5% = 11%
Anticipated Inflation rate is the rate at which it is expected that price levels would rise.
Real interest rate is the rate of interest that has been adjusted for the effects of inflation.
I hope my answer helps you
Answer:
Check the following calculations
Explanation:
Bond trade at Par, thus,
Cost of Debt = Coupon rate = 8%
Tax rate = 35%
Post-tax cost of Debt (kd) = 0.08*(1-0.35) = 0.052
Beta of stock = 1.25
Market return = 10%
T-bills rate = 4%
Cost of Equity (ke) = 0.04*1.25*(0.1-0.04) = 0.115
Debt to equity ratio = 3
Weight of Debt (wd) = 3/4 = 0.75
Weight of equity (we) = 0.25
WACC= wd * kd+ we *ke
WACC =0.75* 0.052+0.25* 0.115
WACC =0.06775
WACC= 6.76%
Please note: In above solution, CAPM model used to determine the cost of equity because CAPM model gives minimum required return by equity investors.
Answer:
Administrative costs allocated to Mixing: $96,000;
Administrative costs allocated to Bottling: $64,000.
Explanation:
Total number of employees = Number of employees in Mixing + Number of employees in Bottling = 300 + 200 = 500 employees.
Number of administrative cost allocation per 01 employees = 160,000 / 500 = $320 per employees.
Administrative costs allocated to Mixing = Number of administrative cost allocation per 01 employees x Number of Employees in Mixing = 320 x 300 = $96,000
Administrative costs allocated to Bottling = Number of administrative cost allocation per 01 employees x Number of Employees in Bottling = 320 x 200 = $64,000.
I think it may be b, but i dont know for sure. good luck
Answer:
$163 million
Explanation:
The computation of service cost is shown below:-
Service cost = Projected benefit obligation - December 31 - Projected benefit obligation January 1 - Interest cost (340 × 10%) + benefit payment to retiree Dec 31
= $480 million - $340 million - $34 million + $57 million
= $537 million - $374 million
= $163 million
Therefore for computing the service for we simply applied the above formula.