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Ganezh [65]
3 years ago
5

Blossom Co. has a capital structure, based on current market values, that consists of 30 percent debt, 3 percent preferred stock

, and 67 percent common stock. If the returns required by investors are 10 percent, 13 percent, and 15 percent for the debt, preferred stock, and common stock, respectively, what is Blossom’s after-tax WACC? Assume that the firm’s marginal tax rate is 40 percent.
Business
1 answer:
lozanna [386]3 years ago
5 0

Answer:

The WACC is 12.24%

Explanation:

The WACC or weighted average cost of capital is the cost of a firm's capital structure. The capital structure can be comprised of three components which are debt, preferred stock and common stock.

The formula for WACC is,

WACC = wD * rD * (1-tax rate)  +  wP * rP  +  wE * rE

Where,

  • w represents the weight of each component in the capital structure
  • r represents the cost of each component
  • We take the after tax cost of debt. Thus we multiply the cost of debt by (1 - tax rate)

WACC = 0.3 * 0.10 * (1 - 0.4)  +  0.03 * 0.13  +  0.67 * 0.15

WACC =0.1224 or 12.24%

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amid [387]

Answer:

DR Cash $589  

DR Credit Card expense $31

CR Sales  $620

<em>(To record sales via credit card)</em>

<u>Working</u>

Cash

= 620 * ( 1 - 5%)

= $589

Credit Card Expense

= 620 * 5%

= $31

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3 years ago
I am willing to take AP classes if.<br><br>can someone help me out of explaining please​
PIT_PIT [208]
I am willing to take AP classes if the classes will continue to help my knowledge grow and provide new learning experiences.
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3 years ago
On his way home from work, Phil stopped at a shopping center. He parked in front of the dry cleaner, where he could pick up his
Anika [276]

Answer:

Neighbourhood centre

Explanation:

A neighbourhood centre is a place where local local residents have access to a wide range of services. People gather for group activities, social support, public information and so on.

Phil stopped at a shopping center. He parked in front of the dry cleaner, where he could pick up his suit. He did not have to move his car because next door was a gift shop where he could pick up a gift for his niece. Conveniently enough, next door to that store was a supermarket, where he purchased essentials like milk and cornflake cereal.

Phil is at a neighbourhood centre where wide variety of services are provided locally.

7 0
3 years ago
Read 2 more answers
A shareholder invested in a mutual fund and has signed a letter of intent to invest $25,000. Her original investment was $13,000
Delvig [45]

Based on the information given for her to complete her letter, she must deposit D) $12,000.

<h3>Deposit:</h3>

Using this formula

Deposited amount=Amount invested-Original investment

Where:

Amount invested=$25,000

Original investment=$13,000

Let plug in the formula

Deposited amount=$25,000-$13,000

Deposited amount=$12,000

Inconclusion for her to complete her letter, she must deposit D) $12,000.

Learn more deposit here:brainly.com/question/1752098

5 0
3 years ago
True or false: production runs can be scheduled in one or two shifts.
irina1246 [14]
The answers are as follows:
1. TRUE.
Shift schedule is a practice used in manufacturing industries to increase the numbers of hours that is used in production process. The shift divides the hours in the day into specific period and assign teams that will work during each period. The shift practice is usually employed in production run in order to ensure efficient use of all resources during the production process. Production run are typically schedule into one or two shifts; which may be during the day alone or during the day and night.
2. FALSE
Hiring the needed complement will eliminate OVERTIME, not the second shift. Hiring the needed complement usually remove the need for all overtime. Hiring the needed complement will make having a second production run team possible and this second team can handle the production process that ought to be done through overtime.
3. FALSE.
It is the duty of the management to strive to DECREASE STAFF TURNOVER.
Staff turnover refers to the rate at which employees are leaving a company and new employees are been absorbed. High staff turnover will make the company to spend more money on resources and training of new staffs.  
4. TRUE.
During periods of high demand, production usually increases and more workers are hired. Instead of hiring more workers, a company that has two production shifts may decide to add more workers to the first shift in order to increase the amount of work that could be done. This will result in the decrease in the number of the workers in the second shift.
5. FALSE
Increasing training hours decreases needed complement. Increasing the training hours will equip the workers with the needed knowledge which will make them more effective and productive. This will decreases the complement needed for the production process.
6. RECRUITING COST [B].
In a situation where a company has to hire more workers to the one it already has on ground as a result of increased production, then the company will have to spend extra money in the process of recruiting the needed workers.
7. DECREASE [B]
If the productive index is already at 100%, adding overtime will decreases the productivity index. This is because, overtime has a way of reducing the efficiency and the productivity of the workers, thus decreasing the amount of work done by them.
8. FALSE.
Workers training is entered in hours. The amount of training received by workers are measured in hours. The higher the training hours, the higher the amount of training which a worker has undergone and the higher will be the value of that worker to the company.
9. C
Each company is expected to have a base amount of $1,000 for each new worker that is hired. The company may decide to eliminate all other recruiting costs but this base amount can not be eliminated.
10. SEPARATION COST [C].
Separation cost are incurred when production level decreases and/ or automation level increases.
Separation cost refers to the cost that is needed to lay off an employee from an organisation. When the production level decreases or the company decide to automate their production processes, then some workers will have to be sacked and these workers have to be paid some money before they leave the company. This result in increase in the amount of money that the company will spend on separation cost.
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