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Hunter-Best [27]
3 years ago
11

A firm has $76,000,000 in debt, which accounts for 43% of their total funds raised; the after-tax cost of these funds is 6.10%.

The same firm has $100 million in common stock, which accounts for 57% of their total funds raised; their after-tax costs (including transaction costs) are 15.7%. What is the weighted average cost of capital for these funds?
10.21%
8.92%
2.63%
11.55%
Business
1 answer:
Digiron [165]3 years ago
7 0

11.55% is the weighted average cost of capital for these funds

Explanation:

Firm has 76000000 in debt and 100000000 in equity. Thus the proportion of debt =

             = 76000000/(76000000 + 100000000)

             = 43.18%

and proportion of equity =  1 - 43.18%  = 56.82%

Therefore, WACC =  0.4318 * 6.1 + 0.5682 * 15.7

                               = 11.55%

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Casey Electronics has a piece of machinery that costs $300,000 and is expected to have a useful life of 6 years or 40,000 hours.
kozerog [31]

Answer:

None of the given options.

Depreciation expense for year 1 would be $37,500.

Explanation:

Cost = $400,000

Residual value = $50,000  

Expected hours = 40,000

Working hours (year 1) = 6,000 hours  

Now,  

Depreciation per hour = \frac{Cost-Residual Value}{Expected hours}  

Depreciation per hour = \frac{300,000 - 50,000}{40,000}  

Depreciation per hour = \frac{250,000}{40,000}  

Depreciation per hour = $6.25

Depreciation expense (year 1) = Depreciation per hour × Working hours (year 1)

Depreciation expense (year 1) = $6.25 × 6,000

Depreciation expense (year 1) = $37,500

4 0
3 years ago
To assess risk and return involved in a purchase decision, which practical questions should a potential buyer ask? Check all tha
vaieri [72.5K]
I believe the answer is: 

- What can go wrong?
This question is asked to find out the potential risk that may occur after purchasing the product.

- What is the likely return?
This question is asked to find out potential benefit from consuming the product

-Is the risk worth the return?
<span>The purchase should be made only if the potential benefit would outweigh potential risk

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4 0
3 years ago
Read 2 more answers
In larger organizations that have stock ownership plans, the employees may not see a strong link between their actions and the c
NemiM [27]

Answer:

True

Explanation:

Stock ownership plans refer to those plans whereby the existing employees are provided with an opportunity to purchase the stocks of the company at a lower price than they are offered in the open market

Employee stock option plans are one of the stock ownership plans. The condition for availing such plans is usually the length of the service of the employees. The benefit is recorded as an employee compensation.

In the context of big organizations with innumerable employees, employees may not be able to identify themselves as significant and may consider those with major chunk of shareholdings as the ones whose actions affect the stock price.

This being merely an illusion since collective efforts of all the employees affect the company's stock price.

8 0
3 years ago
If you are using your factors of production at 100% efficiency, you will be A. on the curve B. at the top of the curve C. at the
STALIN [3.7K]

Answer: A. On the curve.

Explanation:

Production possibilities curve (PPC) is simply a graphical representation that is used to show different combinations of two goods which a particular economy can produce when the economy uses the resources it has efficiently.

Points on the curve shows that the resources in an economy are efficiently used, points on the interior of the curve shows that the resources are used inefficiently while the points that are beyond the curve shows are referred to as unattainable.

Therefore, if you are using your factors of production at 100% efficiency, you will be on the curve.

The answer is A.

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Hawaiian food would be an example of what type of cuisine?
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Nouvelle cuisine



Hope it helps


Pls mark as brainlist
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