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sashaice [31]
4 years ago
5

Western Electric has 23,000 shares of common stock outstanding at a price per share of $57 and a rate of return of 14.2 percent.

The firm has 6,000 shares of 7 percent preferred stock outstanding at a price of $48 a share. The preferred stock has a par value of $100. The outstanding debt has a total face value of $350,000 and currently sells for 102 percent of face. The yield to maturity on the debt is 8.49 percent. What is the firm's weighted average cost of capital if the tax rate is 34 percent?
Business
1 answer:
Over [174]4 years ago
4 0

Answer:

The firm's weighted average cost of capital if the tax rate is 34 percent is 12.69%

Explanation:

total assets = common stock value + preferred stock value + debt

                   = 23000*57 + 6000*48 + 350000*102%

                   = 1956000

WACC

= (common stock value/total assets) * common stock rate of return

+ (preferred stock value/total assets) * preferred stock rate of return

+ (debt value/total assets) * yield to maturity of debt * (1-tax rate)

= (1311000/1956000)*14.2%  + (288000/1956000)*7%  + (357000/1956000)*8.49*(1 - 34%)

= 12.69%

Therefore, The firm's weighted average cost of capital if the tax rate is 34 percent is 12.69%

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he sales of the Garland Corporation are projected to grow exponentially for the years between 2010 and 2015 from $110 million to
katrin2010 [14]

Answer:

between 2010 and 2015 he only grown $50.

Explanation:

That why he come from $110 to $160. In the middle of the years he only grown $50.

I hope it help you understand.

7 0
3 years ago
As you read the business news, you come across an advertisement for a bond mutual fund – a fund that pools the investments fro
Alika [10]

Answer:

Follows are the solution to this question:

Explanation:

Follows are the two ways of describing its high return:

Firstly, the mutual fund is invested in pretty unstable debt and is reciprocating with greater yields for taking a risk.

Secondly, during every decrease in bond yields, the finance kept bonds so the income on stocks exceeded this same rate of interest significantly. Remember that bond costs skyrocket as interest rates drop as well as give the purchaser an investment income. Because once interest rates are now close to zero, it's also likely that they could increase as well as the owners would then lose their money. Its high return could be due to a drop in interest rates, and not only will it not be replicated, but the low or even low return will almost definitely be followed by either a rise in interest rates.

6 0
3 years ago
Miller Company expected to incur $ 15,000 in manufacturing overhead costs and use 6,000 machine hours for the year. Actual manuf
Vsevolod [243]

Answer:

The predetermined overhead allocation rate is $2.5 per machine hour

Explanation:

Predetermined overhead allocation rate is calculated by dividing the Expected overhead by the Expected level of activity on which the overhead is allocated. It is a rate at which the overhead is allocated to a product / project/ department.

Predetermined overhead allocation rate = Expected overhead / Expected activity

Predetermined overhead allocation rate = Expected overhead / Expected machine hours

Predetermined overhead allocation rate = $15,000 / 6,000 machine hours

Predetermined overhead allocation rate = $2.5 per machine hour.

8 0
3 years ago
Laura's boss, Erik, constantly uses sexually explicit language while communicating with his female subordinates. Though many fem
Fittoniya [83]

Answer:

I shouldn't believe or think this will be viewed as offensive conduct because he doesn't threaten any lady throughout particular. A further explanation is given below.

Explanation:

  • Complaining about discrimination based on private orientation as either a misconduct action throughout Title VII of the 1964 civil rights legislation including 29 C.F.R. including its Federal EEO Action Process Portion 1614.
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3 0
3 years ago
Commercial Construction, Inc. (CCI), contracts to build a store for Rita's Pizza Company with Rita's payment due on June 1. On J
krek1111 [17]

Answer:

The correct option is B, Rita's is in breach of contract.

Explanation:

Breach of contract occurs when a party or parties to a legally binding and enforceable agreement refuse to discharge their duties as stipulated in the contract.

Even though Rita's inability to pay as at when due was not intentional as Rita's bank had closed, the onus is still on the company to fulfill its obligation.

It is important that both parties find an amicable way to enforce the terms of the contract or Commercial Construction ,Inc (CCI) tries recover financial damages caused to it by the breach or in an extreme situation, they settle for lawsuit.

6 0
4 years ago
Read 2 more answers
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