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Answer:
a.
WACC = 0.07961 or 7.961% rounded off to 7.96%
b.
After tax cost of debt = 0.0474 or 4.74%
Explanation:
a.
The weighted average cost of capital or WACC is the cost of a firm's capital structure. To calculate the WACC, we multiply the weight of each component of the capital structure by the cost of that component. The components of capital structure can be one or all of the following namely debt, preferred stock and common stock.
The formula for WACC is,
WACC = wD * rD * (1-tax rate) + wP * rP + wE * rE
Where,
- w represents the weight of each component
- r represents the cost of each component
- D, P and E represents debt, preferred stock and common stock respectively
WACC = 0.15 * 0.06 * (1 - 0.21) + 0.1 * 0.05 + 0.75 * 0.09
WACC = 0.07961 or 7.961% rounded off to 7.96%
b.
The after tax cost of debt is calculated by multiplying the cost of debt by (1 - tax rate) to adjust for the tax advantage provided by debt as interest payments on debt are tax deductible.
After tax cost of debt = 0.06 * (1 - 0.21)
After tax cost of debt = 0.0474 or 4.74%
Answer:
Explanation:
The accounting equation is presented below:
Particulars Assets = Liabilities = Stockholders equity
Cash Supplies Account payable Retained earnings
1. Service
Performed $20,000 $20,000
2. Supplies
Purchased $4,000 $4,000
3. Supplies
Used -$3,000 -$3,000
Total $20,000 $1,000 $4,000 $17,000
True, it’s a good idea because it helps protect your home and other assets
Answer:
Vertical distance
y-axis
Horizontal distance
x-axis
where n are integers
Explanation:
The relationship between x-axis and y-axis is determined by cosine function. The sine and cosine functions have a domain of all real numbers. These distances are determined by the vertical distance ratio.
