Answer:
0.2
Explanation:
The weighted average cost of capital (WACC) is calculated as below:
WACC = (D/A) x r_D x (1-t) + (E/A) x r_E , where:
A: Market value of company asset;
D: Market value of company debt;
E: Market value of company equity;
r_D: pre-tax cost of debt;
r_E: cost of equity;
t: tax rate
Rearrange above formula a bit, we get:
WACC = (D/A) x r_D x (1-t) + (1 - D/A) x r_E
Putting all the numbers together, we have:
10.9% = (D/A) x 8.9% x (1 - 38%) + (1 - D/A) x 12%
Solve the equation, we get D/A = 17% or D/E = 0.2
So, target debt−equity ratio is 0.2
Answer:
a) he equilibrum quantity is 95 million pounds of butter and the equilbrum price is $1.20 per pound. At this level, both demand and supply is 95 million.
b) 0 or no surplus.
Explanation:
The question is in three parts
a) a. In the butter market, the monthly equilibrium quantity is million pounds and the equilibrium price is $ per pound
The equilibrum price and quantity refers to that point in sales where the quantity demanded = the quantity supplied.
Looking at the schedule, the equilibrum quantity is 95 million pounds of butter and the equilbrum price is $1.20 per pound. At this level, both demand and supply is 95 million.
b) What is the monthly surplus created in the wholesale butter market due to the price support (price floor) program?
First, what is the price floor fixed by the government = $1.00 per pound and at this rate, the demanded quantity is 101 million and the quantity supplied is 79 million pounds.
Hence, the monthly surplus = 79 million pounds - 101 million pounds = -22 million pounds
At this price, there is no surplus
Answer:
When an investor adds international stocks to his or her U.S. stock portfolio, a. he or she needs to seek professional management because he or she doesn't have access to international investments on his or her own. b. it will have no impact on either the risk or the return of his or her portfolio. c. he or she will increase his or her expected return but must also take on more risk. d. he or she can reduce the risk of his or her portfolio. e. it will raise his or her risk relative to the risk he or she would face just holding U.S. stocks.
Standard Oil
This was an American oil company that was into everything oil from refining to even the transportation, It was set up in 1870 by John D. Rockefeller as an organisation in the state of Ohio, it was the biggest oil refinery both home and abroad as at that time.
