Answer:
WACC without debt is higher by = 1.7%
Explanation:
<em>The weighted Average cost of Capital (WACC) is the average cost of capital for the different sources of long-term capital available to a firm weighted according to the proportion each source of finance bears to the total capital in the pool..</em>
To determine the amount by which WACC would be higher, is the difference between WACC with and without debt.
WACC using debt
<em>Step 1</em>
Cost of debt = Before tax cost of debt × (1-T)
= 7%× (1-0.21) = 5.5%
Step 2
<em>Market value of debt and equity</em>
Market of debt = 200 million
Market value of equity = $55 × 10 = $550 million
Total market value = 550 + 200 = $750 million
Step 3
WACC with debt = ((5.5%× 200) + (12%.× 550))/ 750
= 10.3%
WACC without debt (i.e only equity)
WACC without debt = cost of equity = 12%
Difference in WACC between with and without debt
= 12%- 10.3%
= 1.7%
The WACC without debt is higher by 1.7%
Search up A gardener can increase the number of dahlia plants in an annual garden by either buying new bulbs each year or dividing the existing bulbs to create new plants . The table below shows the expected number of bulbs for each method
Part A
For each method,a function to model the expected number of plants for each year
Part B
Use the Functions to Find the expected number of plants in 10 years for each method.
Part C
How does the of plants in five years compare to the expected number of plants in 15 years !Explain how these patterns could affect the method the gardener decides to use.
Answer:
Societal marketing.
Explanation:
Societal marketing basically is a concept that consider society's long-term interest while fulfilling both consumers' wants company's requirements.
Answer:
The correct answer is letter "D": Values may conflict with each other.
Explanation:
American psychologists Shalom H. Schwartz in his "<em>Theory of Basic Human Values</em>" proposes there are ten (10) values driving individuals' behaviors: s<em>timulation, self-direction, universalism, benevolence, power, achievement, hedonism, tradition, conformity, </em>and <em>security</em>.
<em>According to Schwartz, some values like benevolence and power conflict with each other but some others such as conformity and security are compatible.</em>
Answer:
WACC = 6.66
%
Explanation:
<em>Weighted average cost of capital is the average cost of all of the long-term types of finance used by a company weighted according to the that amount of finance used in relation to the total pool of fund</em>
WACC = (Wd×Kd) + (We×Ke)
After-tax cost of debt = Before tax cost of debt× (1-tax rate)
Kd-After-tax cost of debt = 5%
Ke-Cost of equity = 11.4%
Wd-Weight f debt -74%
We-Weight of equity = 26%
WACC = (0.74× 5%) + (0.26 × 11.4%) = 6.66
%
WACC = 6.66
%
