1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
umka21 [38]
3 years ago
5

A firm is 40% financed by debt with a yield-to-maturity of 8.5%. The equity has a beta of 1.3, the market risk premium is 8.4% a

nd the risk-free rate is 3.8%. What is the firm's WACC if the tax rate is 34%
Business
1 answer:
rjkz [21]3 years ago
5 0

Answer:

11.076%

Explanation:

The computation of the WACC is shown below:

= Weightage of debt × cost of debt × ( 1- tax rate) + (Weightage of  common stock) × (cost of common stock)

= (0.40 × 8.5%) × ( 1 - 34%)+  (0.60 × 14.72%)

= 2.244% + 8.832%

= 11.076%

The cost of common stock is

= Risk free rate of return + Beta × market risk premium

= 3.8% + 1.3 × 8.4%

= 3.8% + 10.92%

= 14.72%

You might be interested in
"In a telecommunications environment, line errors can be detected by using an echo check."
stepladder [879]

Answer:

The correct answer is letter "A": True.

Explanation:

An echo check is an error-detection test. With this technique, a computer sends data to a different computer of the same network hoping to get a response to verify the correct reception. Besides confirming data breakups, it is useful to reduce data loss during line issues.

7 0
4 years ago
Clover Hardware sold a range of products. A few weeks ago, orders arrived for the garden center and outdoor living areas. 500 gr
masya89 [10]

Answer:

COGS= $15,000

Explanation:

Giving the following information:

Purchase= 500 grills

Unitary cost= $75

Units sold= 200

<u>To calculate the cost of goods sold, we need to use the following formula:</u>

COGS= beginning finished inventory + cost of goods purchased - ending finished inventory

COGS= 0 + 500*75 - 300*75

COGS= $15,000

or;

COGS= 200*75= $15,000

7 0
3 years ago
Why there is limited foreign investment in Ethiopia?​
matrenka [14]

Answer:

mainly because of the countries negative trade balance, but also because it is strictly regulated by the central bank which is the National bank of Ethiopia.

5 0
2 years ago
2. Nike, the US Sportswear company, produces all of its footwear in foreign countries (mainly in China, Vietnam, and Indonesia).
djverab [1.8K]

Answer:

Nike is the US Sportswear company, produces all of its footwear in foreign countries (mainly in China, Vietnam, and Indonesia). These countries are developing and labor is cheap there. In this way, the production is cheaper and maintain the price of their product competitive. This way, Nike follows and maintains a specific pricing strategy. Nike also follows a Cost Leadership generic business strategy to sustain a competitive advantage based on cost.

Nike also follows a competitive strategy of 'Product Differentiation', 'Focus on market Niche' and 'Strengthen customer and supplier intimacy' to improve its stand against its competitors. There is huge scope for varied market needs based on games played in different countries across the globe. Thus, there is a huge demand for Nike products outside of their national boundaries.

5 0
3 years ago
The reason that we want to develop a confidence interval for the population mean is because:_____.
Bogdan [553]

Answer:

3. the sampling distribution of the sample mean is normally distributed.

5. the value of the sample mean varies from sample to sample.

Explanation:

We develop confidence interval for population mean because

a. the sampling distribution of the sampling mean is normally distributed. For us to do this we must first ensure that the sample mean is large enough

B. The value of the sample mean is not the same for all samples it varies from sample to sample. Therefore it it is better that an internal is given with the probability that the parameter falls into it.

4 0
3 years ago
Other questions:
  • In the economy of Panicia, the monetary base is $1,000. People hold a third of their money in the form of currency (and thus two
    12·1 answer
  • Yes music is the authorized distributor for products of trompa instruments, a popular manufacturer of trumpets and other brass i
    14·2 answers
  • The interest rate the Fed charges for overnight loans is known as the _____.
    8·2 answers
  • In a portfolio of two different investments, the overall riskiness of the portfolio, at least in theory, could be less than the
    12·1 answer
  • ou currently own $100,000 worth of Wal-Mart stock. Suppose that Wal-Mart has an expected return of 14% and a volatility of 23%.
    15·1 answer
  • I don’t know anything ;-;
    7·1 answer
  • Opportunity costs exist because: a. the decision to engage in one activity means forgoing some other activity. b. wants are scar
    5·1 answer
  • Sheffield Corporation issued 2,000 shares of $10 par value common stock upon conversion of 1,000 shares of $50 par value preferr
    8·1 answer
  • The following information is for employee Robert Ellis for the week ended March 15. Total hours worked: 48 Rate: $15 per hour, w
    8·2 answers
  • Which skill is considered the cornerstone of effective communication?
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!