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nexus9112 [7]
3 years ago
9

Recently, the owner of a trader joe's franchise decided to change how she compensated her top manager. last year, she paid him a

fixed salary of $65,000 and her store made $130,000 in profits (not counting payment to her top manager). she suspected the store could do much better and feared the fixed salary was causing her top manager to shirk on the job
Business
1 answer:
Wewaii [24]3 years ago
8 0

Net earning for owner after payment to top manager, last year = $(130,000 - 65,000) = $65,000

This year, out of the forecast profit of $270,000, Owner has to pay to the top manager = $35,000 + 16% x $270,000

= $(35,000 + 43,200) = $78,200

Net money earned by owner this year = $(270,000 - 78,200) = $191,800

Change in net owner's earning = $(191,800 - 65,000) = $126,800

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Targaryen Corporation has a target capital structure of 65 percent common stock, 5 percent preferred stock, and 30 percent debt.
Juli2301 [7.4K]

Answer:

  • a. What is the company’s WACC?

R_Wacc =  13% (65%) + 5% (5%) + 6% (30%) * (1-0,25) =  10,05%

  • b. What is the aftertax cost of debt?

The aftertax cost of debt is:    

R_Debt :  (1 - 0,25) x 6% = 4,50%

Explanation:

The WACC it's defined by the formula :

WACC: E/V*Re + D/V*Rd *(1-0,25)

Re:   13,00%  Cost of Common Equity    

Re:   5,00%  Cost of Preferred STOCK  

Re:   6%     Cost of Debt  

E/V:   65%   Percentage of financing that is Common Equity  

PS/V:   5%     Percentage of financing that is Preferred Stock  

DB/V:   30%    Percentage of financing that is Debt  

Tax:  25%    Corporate tax rate  

Now we have all of the components to calculate the WACC.

The WACC is:      

R_Wacc =  13% (65%) + 5% (5%) + 6% (30%)*(1-0,25) =  10,05%  

The aftertax cost of debt is:    

R_Debt :  (1 - 0,25) x 6% = 4,50%

5 0
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Answer:

1.  7.2

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XX-XX-XXX     Finished Goods                                $1,469,000

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Answer:

4

non of

the above

I hope

it

give you

answer

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