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Leno4ka [110]
3 years ago
15

Mountain Groves has an unlevered cost of capital of 13.2 percent, a cost of debt of 8.3 percent, and a tax rate of 21 percent. W

hat is the target debt-equity ratio if the targeted cost of equity is 14.5 percent?
Business
1 answer:
laiz [17]3 years ago
7 0

Answer: D/E ≥ 0.3358

Explanation:

Given that,

Unlevered cost of capital = 13.2 %

Cost of debt = 8.3 %

Tax rate = 21 %

Targeted cost of equity = 14.5 %

D/E = target debt-equity ratio

Targeted cost of equity ≥ Unlevered cost of capital + (Unlevered cost of capital - Cost of debt) × D/E × (1 - Tax rate)

                             14.5% ≥ 13.2% + (13.2% - 8.3%) × D/E × (1 - 21%)

                             0.013 ≥ 0.03871 × D/E

                                D/E ≥ 0.3358

Therefore, the target debt-equity ratio is D/E ≥ 0.3358.

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Answer:

The weighted average unit contribution​ margin is 7,92

Explanation:

The weighted average unit contribution​ margin is the sum of the contribution margin of each product multiplied by the quantity sold of that product ,  then divided by the sum of all the products.  

CM average=(CMᵃ * Qᵃ+CMᵇ * Qᵇ)/(Qᵃ+Qᵇ)

CM average=($ 7.25 * 800+$ 9.00 * 500)/(800+500)

CM average=($5800+$4500)/(1300)

CM average=7,92

3 0
3 years ago
The primary difference between accrued revenues and unearned revenues is that accrued revenues have:________. a) been recorded a
adoni [48]

Answer: D) not been recorded and unearned revenues have.

Explanation:

Accrued revenue is a term used to describe a sale that has been recognized by the seller, but which has not yet been billed to the customer. Accrued revenue is needed in order to match revenues with expenses. The absence of accrued revenue would tend to show excessively low initial revenue levels and low profits for a business, which does not properly indicate the true value of the organization.

Unearned revenue on the other hand is the money received from a customer for work that has not yet been performed (in advance payment). This is an advantage to the seller who now has the cash to perform the required services. Unearned revenue is a liability for the recipient of the payment.

3 0
4 years ago
Hugo munsterberg believed that psychologists can contribute to industry by _____. for example, munsterberg might suggest that a
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Hugo Munsterberg believed that psychologists can contribute to industry by devising management strategies to influence employees to follow management's interests.
<span>According Munsterberg psychologists can study jobs and determine which people are best suited to specific jobs and can identify the psychological conditions under which employees do their best work. </span>
6 0
3 years ago
A comparable property sold four months ago for $287,000. If the appropriate adjustment for market conditions is -0.50% per month
Ivan

Answer:

$281,260

Explanation:

Question mentions no compounding takes place here.

So adjusted property value = Value n period ago * [1+ (Adjustment factor * n)]

Adjusted property value = 287000 * [1+(-0.50% * 4)] = 287000 * [1+(-2%)] = 287,000 * 98% = $281,260 --> Answer

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3 years ago
Financial markets are important for bringing equilibrium to the loanable funds market, but do not affect the efficient allocatio
Setler79 [48]

The statement," Financial markets are important for bringing equilibrium to the loanable funds market, but do not affect the efficient allocation of scarce resources in the long-run." is false.

<u>Explanation:</u>

Financial markets are important for bringing equilibrium to lonable funds and  in the long run they affect the allocation efficiency of scare resources. They probably shift the scare resouces of the economy from savers to borrowers.

Financial market is an arena where trading of financial derivatives and securities occurs at lower transaction costs. The securities are namely bonds, stocks, etc.,

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5 0
4 years ago
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