Answer:
Cultural gap
Explanation:
The merger of Iota Inc. and Axiom Inc. will be difficult due to the presence of a culture gap. An organization's culture may not always be in alignment with the needs of the external environment. The values and ways of doing things may reflect what worked in the past. The difference between desired and actual values and behaviors is called the culture gap. Culture gaps can be immense, particularly in the case of mergers.
Hope this works!!!!!
Answer:
The expected return on stock is 30%
Explanation:
Growth rate = Return on Equity * Retention ratio
Growth rate = Return on Equity * (1- Payout ratio)
Growth rate = 25% * (1 - 0.40)
Growth rate = 0.25 * 0.60
Growth rate = 0.15
Growth rate = 15%
Hence, Expected return = Dividend return + Growth rate
Expected return = 15% + 15%
Expected return = 30%
Therefore, the expected return on stock is 30%
Answer:
A. if the extra interest cost of borrowing long-term is less than the expected cost of rising interest rates before it retires its debt.
Answer:
WACC = 5.32%
Explanation:
bond's YTM = 8%
cost of equity = 10%
tax rate = 40%
total bonds = $900,000,000
total common stocks = $100,000,000
total firm's value = $1,000,000,000
to simplify the process I will use hundreds of millions
WACC = (1/10 x 10%) + [9/10 x 8% x (1 - 40%)] = 1% + 4.32% = 5.32%