Answer: Option (D) is correct.
Explanation:
The debt to equity ratio is determined by dividing the company's total liabilities by its share holders equity. It is also as financial leverage ratio. This ratio represents a company with a degree of financial risk associated with it.
Higher debt to equity ratio represents that company with a higher risk to shareholder.
When we are comparing the leverage ratio of all the four companies, it was found that Jackson, Inc. company has the greatest financial risk which is represented by its debt to equity ratio of 1.50.
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:
Explanation:
To complete WIP
Conversion: 16,100 units × (100% – 20%) 12,880
Units started and completed (101,000-16,100) 84,900
Ending work in process:
Conversion: 13,100 units × 30% 3,930
Equivalent units of production 101,710
Cost added during the period $ 594,123
Equivalent units of production 101,710
Cost per equivalent unit $ 5.84
Answer:
Ask him which one is the best choice
Explanation:
<span>Which of the following answers correctly defines the principal for a mortgage? The amount of money borrowed. The principal in a mortgage is defined as the amount of money you actually borrowed from the lender to purchase the home. The interest is defined as the amount of money the lender is charging overtime when you pay off the principal. </span>