Answer:
Plan A = 8.55%
Plan A =8.57%
Plan A =7.9%
Plan A =6.58%
Explanation:
The weighted average cost of capital can be computed by multiplying the Cost of capital (after tax) with the weights. The weighted average cost for four plans are as follows
WACC = Cost of capital x Weights
PLAN A
Weights Cost of capital WACC
Debt 3.0 % 15 % 0.45%
Preferred stock 6.0 10% 0.6%
Common equity 10.0 75% 7.5%
WACC 8.55%
PLAN B
Weights Cost of capital WACC
Debt 3.2 % 25% 0.8%
Preferred stock 6.2 10% 0.62%
Common equity 11.0 65% 7.15%
WACC 8.57%
PLAN C
Weights Cost of capital WACC
Debt 4.0 % 35 % 1.4%
Preferred stock 6.7 10% 0.67%
Common equity 10.6 55% 5.83%
WACC 7.90%
PLAN D
Weights Cost of capital WACC
Debt 7.0 % 45 % 3.15%
Preferred stock 7.6 10% 0.76%
Common equity 12.6 45% 5.67%
WACC 6.58%
Answer:
<em>proportion of non-California household earning above 250,000: 1.03%</em>
Explanation:
being Californian's household: 0.12
and from their 0.033 earn above 250,000
that leaves:
0.12 x 0.033 = 0.00396 proportion to household in california which earn above 250,000 per year agsins the entire household population in the country.
Now, 0.013 are the total household above 250,000
we subtract Californian's rich household and get the households for the country:
0.013 - 0.00396 = 0.00904
now we divide this by the .88 household that don't live in california:
0.00904/0.88 = 0.010272727272
The proportion will be of <em>1.03%</em>
Mike will not be able to pay his bills. He will not be able to work with an injured ankle. Mike will live in a cycle of poverty at this rate. Mike needs to move back home with his parents & go back to school. While he is in school he will be able to be on his parents insurance while he gets his education. Then when he gets a degree he will be better suited to take care of himself & live on his own.