<span><span>Risks is lower
</span><span>Family and friends support
</span><span>Easier to allocate time resources
</span><span>Hiring young employees
</span><span>Lower costs
</span>Business innocence</span>
Answer:
WACC for A: 9.05%
WACC for B: 9.50%
WACC for C: 12.20%
WACC for D: 12.65%
Explanation:
WACC for a division will be equal: Percentage of Debt in capital employed by the Division x Cost of Debt + Percentage of Equity in capital employed by the Division x Cost of equity = 50% x 6% + 50% x ( Risk free rate + Beta of each Division x Risk premium) = 3% + 50% x ( 4% + beta of each Division x Risk premium)
Risk premium for the 4 Divisions is equal to (Cost of equity for the whole firm - Risk free rate) / beta = 9%
Thus WACC for a division will be equal: 3% + 50% x ( 4% + beta of each Division x 9%).
Substitute beta of each Division from A to D provided in the question, we have: WACC for A: 9.05%; WACC for B: 9.5%; WACC for C: 12.2%; WACC for D: 12.65%.
Answer:
The lump sum be of $237,228.84
Explanation:
In order to calculate how large must the lump sum be we would have to use and calculate the formula of Present value of annuity due as follows:
Present value of annuity due=(1+interest rate)*Annuity[1-(1+interest rate)^-time period]/rate
Present value of annuity due=(1+0.075)*$25,000[1-(1.075)^-15]/0.075
Present value of annuity due=$25,000*9.489153726
Present value of annuity due=$237,228.84(Approx)
The lump sum be of $237,228.84
Answer:
Solution for question 1
It is not necessary that action that lower the short term interest rate will lower the long term interest rate also.
So given statement is false.
Solution for question 2
Because of subprime crisis in 2008 most of the Market collapsed and there is a huge problem of liquidity. Yield on US treasury security was decreased and so the price of treasury securities was increased.
Hence, given statement is true.
Solution for question 3
Countries with strong balance sheet mean countries are developed and so interest rate in these countries is lowered.
Hence, given statement is true.
Solution for question 4
One of the major function of Federal Reserve is to control economic activities. In the Era of globalization all countries economy is depend on other economy. So interest rate in USA highly dependent on other countries.
Hence, given statement is true.
Answer: You shouldn't dwell on any negatives and weakness because you want to be truthful but also not show that you cant compose yourself and then it shows that your unable to service the job correctly.
Explanation:
