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garri49 [273]
3 years ago
14

Pearson Motors has a target capital structure of 35% debt and 65% common equity, with no preferred stock. The yield to maturity

on the company's outstanding bonds is 11%, and its tax rate is 40%. Pearson's CFO estimates that the company's WACC is 12.90%. What is Pearson's cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places. 16.29 %
Business
1 answer:
coldgirl [10]3 years ago
4 0

Answer:

ke=16.29

Explanation:

WACC=We*ke+Wd*kd(1-t)

Where:

We=weight of common equity in the capital structure

ke=cost of equity

Wd=Weight of debt in the capital structure

kd= Cost of debt i.e yield to maturity on the bonds

t= tax rate.

Since WACC is estimated to be 12.9%

0.129=0.65*ke+0.35*0.11(1-0.4)

ke=\frac{0.129-[0.35*0.11(1-0.4)]}{0.65}=0.162923

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Answer:

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Explanation:

Here the inventory should be recorded at lower of cost or net realizable value

Since the cost per unit is $46

And, the net realizable value is $48

So, the lowest cost per unit is $46

Now the ending inventory reported is

= 18,000 units × $46 per unit

= $828,000

hence, the inventory be reported at on the December 31 balance sheet is $828,000

6 0
3 years ago
A union election was held by the NLRB at Jaxon Industries, and 130 workers cast votes in the election. How many votes in favor o
zimovet [89]

Answer:

66

Explanation:

When union workers vote to elect their representatives, the representative must be elected by a simple majority of the votes. A simple majority means 50% plus 1. In this case 50% of 130 votes = 65 votes plus 1 = 66 votes.

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3 years ago
g Marginal revenue product (MRP) of labor refers to the: A. amount by which a firm's total resource cost increases when it emplo
UNO [17]

Answer:

c

Explanation:

Marginal revenue product (MRP) is the change in total revenue when one more unit of a resource is employed.

For example :

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1                             100

2                             200

The MRP of employing 2 units of labour = (200 - 100) / (2 -1) = 100                          

7 0
3 years ago
The overlap that occurs when the same people see an ad twice is referred as
telo118 [61]
B. That is duplicated reach
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3 years ago
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Answer:

The correct answer is Production loss.

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The quantifiable cost associated with the interruption of the operation of a pump is low when compared to the cost throughout its useful life in an installation carried out in a commercial building. However, the loss of comfort suffered by users of the building makes it advisable to have a spare pump.

Unlike what happens in production processes, stopping a pump from a commercial building almost never results in a loss of production. On the contrary, the interruption is usually translated into a loss of comfort. However, the immeasurable costs associated with downtime may be even higher if, for example, hotel guests run out of water. Therefore, it is always advisable to install a replacement pump to prevent comfort losses caused by an unexpected failure in the pumping system. The communication capabilities of electronically controlled pumps E help minimize downtime because replacement and repair work can be completed more quickly in the event of a breakdown. A backup pump is used to prevent downtime and consequent loss of comfort in the event of a breakdown.

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