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Answer:
a) WACC = 12.20%
Explanation:
Weighted average cost of capital is computed by allocating weights to different capitals.
Cost of bonds = Cost of debt = 5%
Cost of preferred stock = 9%
Cost of equity = 16%
As it is new issued and not from retained earnings.
With weights cost will be as follows
Bonds = 5% X $5/$20 = 1.25%
Preference share = 9% X $3/$20 = 1.35%
Equity = 16% X $12/$20 = 9.6%
WACC = 1.25 + 1.35 + 9.6 = 12.20%
Supply is an economic term that refers to the amount of a given product or services that suppliers are willing to offer to consumers at a give price level at a given period.
Answer:
It contributes to political and civil freedom, in theory, since everybody has the right to choose what to produce or consumer. It contributes to economic growth and transparency. It ensures competitive markets.
