Answer:
The correct answer is letter "C": produces products that are considered elastic.
Explanation:
Elasticity refers to the sensitivity of a good or service to reflect change in its supply or demand after a change in price. A product's supply is said to be elastic if the changes in the quantity supplied increases and it immediately determines a price in the price.
Thus, if for technological reasons the output of a company increases, considering that the product is elastic, the prices will increases which will provide the organization more revenue. That firm will be more than glad about the technological advance.
Answer:
if you are only picking one the answer is C if you are picking multiple it is B and C
Answer:
Since the bond's coupon rate is identical to the market rate, then they should have been sold at face value. Since we are not given any costs associated to the issuance, then I will assume it is $0.
January 1, bond issuance:
Dr Cash 650,000
Cr Bonds payable 650,000
December 31, coupon payment:
Dr Interest expense - bonds 78,000
Cr Cash 78,000
Answer:
do u mind sending the picture of the question
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%.
