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Lera25 [3.4K]
3 years ago
15

The following information comes from the Galaxy Construction balance sheet. The value of common stock is​ $10,000, retained earn

ings equals​ $7,000, total common equity equals​ $17,000, preferred stock has a value of​ $3,000, and longminusterm debt totals​ $15,000. If the cost of debt is​ 8.00%, preferred stock has a cost of​ 10.00%, common stock has a cost of​ 12.00%, and the firm has a corporate tax rate of​ 30%, calculate the​ firm's WACC adjusted for taxes.A.​10.11%B.​9.09%C.​10.00%D.There is not enough information to answer this question.
Business
1 answer:
Setler [38]3 years ago
8 0

Answer:

The WACC is 9.09% and option B is the correct answer.

Explanation:

The WACC or the weighted average cost of capital is a firm's average cost of its capital structure that comprises of debt, preferred stock and common equity. The formula fro WACC is,

WACC = wD * rD * (1-tax rate)  +  wP * rP  +  wE * rE

Where,

  • wD, wP and wE represents the weightage of debt, preferred stock and common stock in the capital structure or as a proportion of total assets
  • rD, rP and rE represents the cost of debt, preferred stock and common stock
  • We take the after tax cost of debt. So, rD is multiplied by (1- tax rate)

Total Assets = 17000 + 3000 + 15000 = 35000

Taking out these values in thousands for simplicity.

WACC = 15/35 * 0.08 * (1-0.3)  +  3/35 * 0.1  +  17/35 * 0.12

WACC = 0.09085 or 9.085% rounded off to 9.09%

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How does consumer response to advertising vary on different days of the week and at different times of the day
Romashka-Z-Leto [24]

Answer:

The theme is very complex, however a short explanation of that type of distribution is given below with and example.

Explanation:

To begin with, that distribution of variables will totally depend on the type of product that is being under study. Having that in mind, the distribution to the advertising will be more or less strong on the consumer's attention depending on the day. Therefore that, for example, if the case is about an alcoholic drink or something related to the weekends like clothes for going out or something like that, then the advertising will cause more impact in the consumer on fridays and saturdays and that will be like that because the consumer will now be exposed to the possible situation of going out that exact night so he or she might want to consumer an alcoholic drink.

It will be the same with the hours of every day, if the advertising is shown late at night but before party time, then the consumers will be exposed to that commercial and will the necessity of buying, psychologically speaking.

3 0
3 years ago
While stocking the shelves with a new soup, the store manager notes a difference in price between the 16-ounce can and the 32-ou
asambeis [7]

Answer:

The correct answer is: Cost-Plus Pricing Strategy.

Explanation:

To begin with, a ''Cost-Plus'' is the name that a pricing strategy receives in the field of marketing and business that mainly focuses on the pricing of a product by the cost of it plus a certain porcentage of benefit, considering this last one as the benefit margin. Moreover, this type of pricing strategy is one of the most common ones in the field, typically the businesses use this type of pricing strategy due to the fact that it is easy to establish and it does not consider complex terms.

Secondly, in this case where the manager notices such a difference in the prices of the two cans is due to the fact that the manufacturer put less commodities and less effort in the can of 16-ounce rather than in the other can of 32-ounce where there is more soup and therefore there is more cost in that can, establishing that a higher price must put in that one.

5 0
3 years ago
Which of the following is NOT one of the managerial considerations in determining how to compete successfully? How should a comp
hodyreva [135]

Answer:

 Strategy of company concerns are explained as the action plan management,and organisational objectives.

Explanation:      

A.  A more appealing product needs to be offered to rivals for new product.

B. planning of money.

C.  action plan for management function for achieving superior profitability.

D. The company should pursue, the long-term direction management.

E. conservative defense to project

    The action plan management of the company is taking to:

A.  role out a market position,  to attract and satisfy customers, successfully,

perform the operations, and achieve all objectives.

B. conduct a sustainable competitive method and compete against rivals.

C. make your product offering more different and appealing for buyers.

D. conduct the operations.

Organizational objectives are achieved by the following methods:

A. strategic intent

B. statement of the mission.

C. plan of action.

D. business module.

E. strategic vision.

The objectives requires well groomed management to strive to:

A. match your rival businesses products and quality dimensions.

B. short-term success and build profit.

C. realignment in the market.

D. developing lasting success.

E. re-create the bussiness models.

To improve performance, for different avenues:

A. lowering the operating profit margins than rivals to drive sales

growth.

B. achieving analogous of the products.

C. pursing similar personalized customer service or quality dimensions as rivals.

D. Confination of operations to the markets.

4 0
3 years ago
lpha Moose Transporters has a current stock price of $33.35 per share, and is expected to pay a per-share dividend of $1.36 at t
kirza4 [7]

Answer:

13.86%

Explanation:

Calculation to determine the flotation-adjusted (net) cost of its new common stock

Using this formula

Cost of new common stock(re) = [d1 / stock price (1-flotation cost)] +g

Let plug in the formula

Cost of new common stock(re)= [$1.36 / 33.35 (1 – 0.065)]+0.094

Cost of new common stock(re)= [$1.36 / 33.35 (0.935)]+0.094

Cost of new common stock(re)= [$1.36/31.182)+0.094

Cost of new common stock(re)=0.04361+0.094

Cost of new common stock(re)=0.1376*100

Cost of new common stock(re)=13.76%

Therefore the flotation-adjusted (net) cost of its new common stock will be 13.76%

5 0
2 years ago
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Tasya [4]

Answer: True

Explanation:

Something that has caught the attention of many has been how electronic money has been used in countries like Kenya and Somalia. A study has confirmed that the use of mobile money has reduced poverty in places like Kenya. Mobile money is defined as money where people can make financial transactions through their phones.

This type of activity has greatly influenced poverty reduction and the high rates that occurred when people had to send money over certain distances. In countries like Somalia, there are no longer any traces of physical money, everything is virtual. In this way, the country has achieved economic stability for years. People increasingly consume through their mobile phones, making in an easier way all kind of payments.

7 0
3 years ago
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