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Irina-Kira [14]
3 years ago
15

Precision Cuts has a target debt-equity ratio of 0.55. Its cost of equity is 15.4 percent, and its pretax cost of debt is 7.8 pe

rcent. If the tax rate is 32 percent, what is the company's WACC?
A) 10.91 percent
B) 11.82 percent
C) 11.28 percent
D) 10.72 percent
E) 10.20 percent
Business
1 answer:
Alex73 [517]3 years ago
6 0

Answer:

B) 11.82 percent

Explanation:

WACC formula = wE*rE + wD*rd(1-tax)

wE = weight of equity

rE = cost of equity

wD = weight of debt

rd = pretax cost of debt

If D/E = 0.55 / 1 , then  D+E = 0.55 +1 = 1.55

therefore wD = 0.55 / 1.55 = 0.3548 or 35.48%

and wE = 1 / 1.55 = 0.6452 or 64.52%

Next, plug in the numbers to the above WACC formula;

WACC = (0.6452*0.154) + [0.3548* 0.078(1- 0.32) ]

= 0.0994 + 0.0188

= 0.1182 or 11.82%

Therefore, the company's WACC = 11.82%

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In the context of project management, a task duration is always the same as the amount of work (effort) it takes to finish the t
Mashutka [201]

Answer:

False

Explanation:

The statement that says that in the context of project management, a task duration is always the same as the amount of work (effort) it takes to finish the task is false because the effort is the time a person needs to finish a task while the duration is the period of time that a person has to finish it. For example, an employee has a task that takes forty hours of work to finish it but he has a month to do it. In this case, the effort is forty hours but the task duration is one month.

4 0
3 years ago
g You deposit $1,900 in your savings account that pays an annual interest rate of 3.25%. If the inflation rate is 1.09%, by how
gayaneshka [121]

Answer:

Real purchasing power increase= 2.16%

Explanation:

Giving the following information:

You deposit $1,900 in your savings account that pays an annual interest rate of 3.25%. The inflation rate is 1.09%.

In this example, we have two different and opposite effects. The interest rate increases your purchasing power. If the inflation rate is 0, the purchasing power will increase (in one year) 3.25%.

The inflation rate decreases the purchasing power of nominal income.

Real purchasing power increase= annual interest rate - inflation rate

Real purchasing power increase= 3.25 - 1.09= 2.16%

6 0
3 years ago
What is the difference between a demand curve and a demand schedule?
svetlana [45]

Answer:

Demand schedule:

The Demand schedule refers to the tabular representation of the quantity demanded at the various price levels. By observing the demand schedule, we can conclude that as the price of the good increases then as a result the quantity demanded for that good falls. It represents various combination of price and quantity demanded.

Demand curve:

A demand curve refers to the graphical representation of the demand schedule which shows the relationship between the price of the commodity and the quantity demanded for that commodity. It is downward sloping curve which shows that there is an inverse relationship between the price of a good and the quantity demanded.

5 0
2 years ago
In ________ organizational cultures, more individuality is shown through the organization's rules being less strictly applied.
kap26 [50]

Answer:

weak

Explanation:

An organization's culture describe the behavior of an organization. It comprised of the beliefs and values that should be shared in the organization

In the case when there is a weak organization culture so here the rules of the organization should be less strictly followed instead of more strictly followed as it is a weak organization structure

Therefore the weak should be the term that should be applied in the current situation

3 0
3 years ago
Ocean House must use various metrics to measure the benefits of its human capital in order to determine the effectiveness of its
Anettt [7]

Answer:

a.  Human capital return on investment

Explanation:

Human capital return on investment  -

It helps to determine the profit return of the company or organisation on the per unit expenditure on the employees , is referred to as the Human capital return on investment  .

It is basically the interconnection between the profit of the company and the cost on the workforce .

hence , from the given scenario of the question,

The correct option is a.  Human capital return on investment  .

5 0
2 years ago
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