Answer:
a. re > rs > WACC > rd.
Explanation:
Re represents cost of equity
Rs represents cost of retained earnings
WACC represents Weighted average cost of capital
Rd represents cost of debt
Basically the cost of equity is highest as there is no assured return on such equity investment.
Cost of retained earnings is less than cost of equity because amount invested is already in hands of company, although belonging to equity holders, thus is higher than total weighted cost of capital.
WACC is the cost after providing weights to every source of capital it is lower then equity, higher than debt because of average.
Cost of debt is lowest because of tax benefit from it.
Answer:
66.67%
Explanation:
A firm has an EPS of $12
The dividend paid is $4
The first step is to calculate the payout
= 4/12
= 0.3333×100
= 33.33
Therefore the Plowback ratio can be calculated as follows
= 1-33.33%
= 0.667×100
= 66.67%
Hence the Plowback ratio is 66.67%
Answer:
10 tabletops
Explanation:
Given that her basic weekly income is $300
Hence for her to meet are target of $1000 she has to work for the extra $700 since $300 is guaranteed
If one completed table top earn her $75
Hence she must complete 10 table tops to earn $750
Total earning = 750+300= $1050
