Answer:
1) country A has a comparative advantage in production of capital goods.
2) for country A 24 units of food can be traded for 10 units of capital goods,
for country B 30 units of food can be traded for 10 units of capital goods.
Explanation:
country A has a comparative advantage in production of capital goods because they have been able to produce more capital goods with the same amount of input (worker) than country B.
For country A, 120 units of food = 50 units of capital goods, therefore
10 units of capital good will be traded for (120 x 10)/50 = 24 units of food.
for country B 90 units of food is equivalent to 30 units of capital goods, therefore,
(90 x 10)/30 = 30 units of food
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Answer:
in·ter·est
/ˈint(ə)rəst/
Learn to pronounce
See definitions in:
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Commerce
Law
noun
1.
the state of wanting to know or learn about something or someone.
"she looked about her with interest"
Similar:
attentiveness
undivided attention
absorption
engrossment
heed
regard
notice
scrutiny
curiosity
inquisitiveness
enjoyment
delight
Opposite:
boredom
2.
money paid regularly at a particular rate for the use of money lent, or for delaying the repayment of a debt.
"the monthly rate of interest"
Similar:
dividends
profits
returns
a percentage
Explanation:
Answer:
A) 10.15%
Explanation:
Cost of equity (Re) = 14.06% or 0.1406
cost of preferred stock (Rp) = 7/65 = 0.10769
cost of bonds (Rb) = 7.5% or 0.075
outstanding shares = 2.5 million shares x $42 = $105 million
bonds outstanding = $1,000 x 80,000 bonds = $80 million
preferred stock = $65 x 750,000 = $48.75 million
corporate tax rate = 38% or 0.38
total market value of equity + debt (in millions) = $105 + $48.75 + $80 = $233.75
WACC = [(outstanding shares / total market value) x Re] + [(preferred stock / total market value) x Rp] + {[(bonds outstanding / total market value) x Rb] x (1 - tax rate)}
WACC = [($105m / $233.75m) x 0.1406] + [($48.75m / $233.75m) x 0.10769] + {[($80m / $233.75m) x 0.075] x (1 - 0.38)}
WACC = 0.06316 + 0.02246 + 0.01591 = 0.10153 or 10.15%
