Answer: .27
Explanation:
The Debt to Equity Ratio is the amount of Debt per dollar that the company owes per dollar of Equity. It must add up to 1.
The Weighted Average Cost of Capital measures just how much a company needs to pay to it's capital holders including shareholders and debt holders.
The formula is,
WACC = (Cost of equity * Weight of equity) + (Cost of debt * Weight of debt)
Remember that Debt is tax deductible so the After tax cost of debt should be,
= 5.2% ( 1 - tax rate)
= 5.2% * ( 1 - 39%)
= 3.172%.
The debt weight is the amount of debt that the company has per dollar so that means that it is also the Debt to Equity ratio. Denote it as 'x' to find it. Remember that they must add up to one.
WACC = (Cost of equity * Weight of equity) + (Cost of debt * Weight of debt)
8.59% = 10.6% ( 1 - x) + 3.172%( x)
8.59% = 10.6% - 10.6%x + 3.172%x
8.59% = 10.6% - 7.428%x
7.428%x = 10.6% - 8.59%
7.428%x = 2.01%
x = 0.271
= 27%
Debt to Equity is 0.27.
Answer:
see below
Explanation:
Equity financing involves selling shares to investors. The entrepreneurs surrender part ownership to third parties. It means profits have to be shared, and there have to consultations in every major decision.
Debt financing involves borrowing from lenders. It has a big advantage in that the entrepreneur maintains full control of the business. They do not have to share profits with other people or risk being kicked out of the business. However, debts have to be paid. The monthly repayment for several years can have hamper progress. It reduces profits, making a business seem less valuable.
A business should balance between equity and debt financing. As much as possible, equity financing should have a bigger proposition of capital to be profitable and increase in worth.
180 days of the most recent paycheck reflecting the discrepancy.
Answer:
a. Date Account Title and Explanation Debit Credit
Insurance Expenses $2,800
Prepaid Insurance $2,800
(To record 6-month Insurance coverage expired)
b. Date Account Title and Explanation Debit Credit
Supplies Expenses $10,200
Supplies $10,200
(8,200 +3,600 - 1,600)
(To record supplies consumed during the year)
Answer:
$25
Explanation:
Please check the attached image for a diagram of exhibit 3-1
The total quantity demanded can be found by adding the sum of the quantity demanded at $5.
Jane doesn't demand at $5, so her quantity demanded is 0
For Henry it is 8
For Bob, it is 17
Total quantity demanded ia 25
I hope my answer helps you
