Present value PV= FV(1/(1+r)^n)
PV = Present Value
FV = Future Value
r= rate
n= number of years
Just plug in the numbers and calculate.
Answer:
Option (C) is correct.
Explanation:
We have to use MM proposition that cost of equity will change itself in such a manner so that it can take care of its debt.
Cost of equity:
= WACC of all equity firm + (WACC of all equity - Cost of debt ) × (Debt -to-equity ratio)
At the beginning, when there was no debt,
WACC = cost of equity = 12 %
Levered cost of equity:
= 12% + ( 12% - 6%) × 0.5
= 15%
Therefore, Rearden's levered cost of equity would be closest to 15%.
The service or tool that could be used for gaining the benefits should be AWS Orgs.
The information related to AWS Orgs is as follows:
- AWS Organization should be an account management service.
- In this, there are multiple AWS accounts that should be consolidated for developing and managing.
- As an organization administrator, the accounts should be developed and the existing accounts should be invited for joining the organization.
Therefore we can conclude that the service or tool that could be used for gaining the benefits should be AWS Orgs.
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