1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
seropon [69]
3 years ago
5

Protec Company, whose target capital structure is 40% debt, 15% preferred, and 45% common equity. The after-tax cost of debt is

5.00%, the cost of preferred is 7.0%, and the cost of retained earnings is 11.50%. The firm will not be issuing any new stock. What is its WACC? 6.75% 7.18% 7.64% 7.93% 8.23%
Business
1 answer:
taurus [48]3 years ago
3 0

Answer:

The correct answer is 8.23%.

Explanation:

According to the scenario, the computation can be done as:

WACC of debt = Respective costs of debt× Respective weight of debt

= (0.4 × 5)

= 2

WACC of preferred = Respective costs of preferred × Respective weight of preferred

= (0.15 × 7)

= 1.05

WACC of common equity = Respective costs of common equity × Respective weight of retained earning

= (0.45 × 11.5)

= 5.175

So, Total WACC = WACC of debt + WACC of preferred + WACC of common equity

= 2 + 1.05 + 5.175

= 8.225 or 8.23 (approx.)

You might be interested in
Which of the following is a service-based business? (Select the best answer.)
Talja [164]
A house cleaning company 
5 0
4 years ago
U.S. exports create a:____.
alisha [4.7K]

Answer:

B) Supply of foreign currencies and a supply of dollars in the foreign exchange markets

Explanation: just search it up they don't demand for foreign currencies they supply of foreign currencies

5 0
3 years ago
Even as it begins to produce the Mirai for the U.S. market, Toyota continues to manufacture its traditionally fueled cars, truck
Shalnov [3]

Answer:

a. volatility

Explanation:

From the question, we are informed that "Even as it begins to produce the Mirai for the U.S. market, Toyota continues to manufacture its traditionally fueled cars, trucks, and SUVs. In case of Doing this it helps Toyota manage the volatility of industrial demand.

volatility of industrial demand do occur where there is uncertainty as far as demand is concerned in the consumer products , as a result of this most firms to catch up with compitition, growing their sales an lot more , so in this case Toyota still continues to manufacture its traditionally fueled cars, trucks, and SUVs even though there is Mirai for the U.S. market.

8 0
3 years ago
Which of the following caused a recession in the years immediately following World War II? A surge in investment spending. Pent-
morpeh [17]

Answer:

The answer is cutbacks in defense production

One of the main reasons of the recession which was immediate after the world war 2 was the government's inability to produce anything as most expense was carried out in the event of the war which decreased the gross domestic product making the economy to fall into recession.

3 0
3 years ago
Read 2 more answers
Complete the missing word in the sentence below to progress!
iren2701 [21]

for a business to be viable,it must make a good or proper sales

7 0
3 years ago
Read 2 more answers
Other questions:
  • Maiko lost her job and she was forced to sell a rental property because she did not have other funds​ (liquid, emergency,​ etc)
    10·1 answer
  • Strong company applies overhead based on machine hours. at the beginning of 20x1, the company estimated that manufacturing overh
    12·1 answer
  • When a firm charges each customer the maximum price that the customer is willing to pay, the firm:_______.a) charges the average
    10·1 answer
  • How many courses do you need to finish a major?
    14·1 answer
  • When comparing the difference between an upstream and downstream transfer of inventory, and using the initial value method, whic
    5·1 answer
  • From a(n) _____ standpoint, the effect on performance motivation may be limited in ownership program because of the less obvious
    7·1 answer
  • Ray's Sounds has accumulated the following cost and market data on March 31: Cost Data Market Data iPods $24,000 $20,400 Cell ph
    14·1 answer
  • You have just purchased a municipal bond with a $10,000 par value for $9,500. You purchased it immediately after the previous ow
    13·1 answer
  • Externalities Musashi plants a variety of trees, shrubs, and flowers in his yard. The landscaping beautifies the neighborhood. W
    9·1 answer
  • A firm has just paid its annual dividend of $5.64 a share. Thereafter the dividend is expected to increase at a rate of 2% a yea
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!