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Lyrx [107]
3 years ago
5

Bargeron corporation has a target capital structure of 64 percent common stock, 9 percent preferred stock, and 27 percent debt.

its cost of equity is 13.4 percent, the cost of preferred stock is 6.4 percent, and the pretax cost of debt is 8.1 percent. the relevant tax rate is 40 percent.
a. what is the company's wacc? (do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places,
e.g., 32.16.) wacc %
b. what is the aftertax cost of debt? (do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places,
e.g., 32.16.) aftertax cost of debt %
Business
1 answer:
dalvyx [7]3 years ago
6 0

a.

WACC is calculated as –

WACC = (Weight of common stock X Cost of common stock) + (Weight of preferred stock X Cost of preferred stock) + (Weight of debt X After tax cost of debt)

WACC = (64% X 13.4%) + (9% X 6.4%) + (27% X ((1- 40%)*8.1%))

WACC = 10.46%

b. After tax cost of debt is calculated as –

After tax cost of debt = (1- tax rate) X cost of debt pre-tax

After tax cost of debt = ((1- 40%)*8.1%))

After tax cost of debt = 4.86%

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Answer:

sole proprietorship

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Since in this case business is under the name of Jim, it is sole proprietorship under the law

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DonCo, Inc. sold merchandise on January 14, and accepted a 90-day, 5% promissory note in the amount of $5,000. On January 14, th
svetoff [14.1K]

Answer:

The required entries on 14 January is as follows:

Dr Notes receivable    $5,000

Cr Sales                                     $5,000

Explanation:

No doubt by selling the merchandise a sale transaction has been discharged since the ownership of the goods has changed hands between the seller and the buyer,hence the seller can record a sale by crediting sales account.

However, since the cash has not been received nor is the transaction a mere credit sale where accounts receivable would been debited,neither the cash nor accounts receivable can be debited.

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When Coca-Cola launched a differing soda product line that includes: regular coke, cherry coke, vanilla coke, coke zero, etc. ne
PSYCHO15rus [73]

Answer:

The correct word for the blank space is: market cannibalization.

Explanation:

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3 years ago
A department store sells refrigerators from four manufacturers: 40% from Company A, 25% from Company B, 15% from Company C, and
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Answer:

A: 0.1475 , B: 0.3389

Explanation:

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Prob(refrigerator purchase from A) and Prob(refrigerator from A life > 15 years) + .........Prob(refrigerator purchase from D) and Prob(refrigerator from D life >15 years)

(0.40x0.1)+(0.25x0.20)+(0.15x0.05)+(0.20x0.25) = 0.04+0.05+0.0075+0.05 = 0.1475  

b. Refrigerator last > 15 years given , Probability it is from B :

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3 years ago
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