Answer:
6.57%
Explanation:
Given that,
D1 = $2.00
Dividend growth rate, g = 4.50%
Stock price, P0 = $47
Before-tax cost of debt = 6.50%
Tax rate = 40%
Target capital structure for Debt = 45%
Target capital structure for Common equity = 55%
Cost of equity:
= (D1 ÷ P0) + g
= ($2.00 ÷ $47) + 4.50%
= 4.25% + 4.50%
= 8.75%
After tax cost of dept:
= Before tax cost of dept × (1 - Tax rate)
= 6.50% × (1 - 0.40)
= 6.50% × 0.60
= 3.9%
Company’s WACC if all the equity used is from retained earnings:
= (Cost of equity × Percent of common equity) + (After tax cost of dept × Percent of debt)
= (8.75% × 55%) + (3.9% × 45%)
= 4.8125% + 1.755%
= 6.57%
I think some people say it as olmen, rather than a silent L,it's silent D instead.
Cities develop in a series of rings/circles.
"Concentric" means circles sharing the same center. Basically, cities start small and then expand in all directions. If you look at a map of a large city, you will often notice highways that are in loops around the city and get larger and larger as you move toward the edge.
Answer:
$175,000
Explanation:
Given:
Per unit cost of manufacturing = $4.50
Normal production rate = 50,000 units per year
Direct materials and direct labor costs = $2.50 per unit
Incremental overhead costs = $50,000 per year
Allocated fixed overhead costs = $50,000 per year
Quoted price = $3.70 per unit
Now,
total relevant cost per unit
= Direct materials and direct labor costs + (allocated fixed overhead costs ÷ Number of units to be made )
= $2.50 + 
= $2.50 + $1
= $3.50
Therefore,
Total relevant cost of making 50000 units
= $3.5 × 50,000
= $175,000
1. 3000 x 600 = $1,800,000
2. 3000 x 420 = $1,260,000
1. - 2. - F = $300,000
