Answer: 9.07%
Explanation:
The Weighted Average Cost of Capital is essentially how much it costs a company to raise all the capital it has including long term debt and equity.
It is calculated by weighing each category of capital with their cost to find the Weighted Average.
In this scenario therefore it will be calculated by,
= 0.37 ( 0.061) + 0.63 ( 0.143)
= 0.02257 + 0.09009
= 0.11266
= 11.27%
It is said that Division A's projects are assigned a discount rate that is 2.2 percent less than the firm's weighted average cost of capital. That would be,
= 11.27 - 2.2
= 9.07%
The discount rate applicable to Division A is 9.07%
Answer:
The dead weight loss created will be equal to $6.
Explanation:
A profit-maximizing monopoly is charging the price of $12.
The profit-maximizing output level is 10 units.
The marginal cost at this level is $6.
The socially optimal level of output is 12 units.
The demand and cost curves are linear.
Since the monopoly firm is producing less than socially optimal level and charging a higher price, it will create a deadweight loss in the market.
The value of the deadweight loss will be equal to the triangular area created by AR, MR and MC curve between socially optimal output and profit-maximizing output.
The deadweight loss
= 
= 
= 
= $6
<h2>stock prices should respond only to unexpected news and events.</h2>
Explanation:
Let us understand the term "financial market":
Here where the trading places. We talk about shares, debentures, etc.
So when the financial markets are efficient, the market is ready with the information which has been incorporated in to the prices of the product. So with respect to the market value the stock price will change or respond only during the unexpected news and events.
It will not increase or decrease based on the new events. It will not remain constant too all times.
Answer:
Trough
Explanation:
Trough
The business cycle has five phases: expansion, peak, contraction, trough, and recovery.
Trough is the crashing process of business contraction, or drop in transactions. In economic terms, it refers to a phase of the business cycle where transactions fall to the rock bottom (also know as bottoming), or where prices and jobs fall significantly before a rise.
Brushlon is most likely going through a period of trough since it is cutting back on production as consumers start turning to basic products such as food because of the economic downturn in the country. Moreover the company is also said to be laying off many of its employees to further cut down expenses.
Answer:
Effective annual interest rate=0.52%
Explanation:
Step 1: Express the formula for calculating interest
The formula for calculating interest can be expressed as;
I=PRT
where;
P=principal amount borrowed
R=annual interest rate as a percentage
T=number of years
Step 2: Determine the value of the variables P, R and T
In our case;
I=$10
P=(125-10)=$115
R=unknown=r
T=2 months=2/12=1/6 years
replacing in the expression;
10=115×r×(2/12)
10=(230/12)r
r=10×12/230=0.5217
0.5217 rounded off to the nearest 2 decimal places is:
r=0.52%
Effective annual interest rate=0.52%
