Answer:
WACC is 9.35%
Explanation:
In order for us to compute the weighted average cost of capital, we have to first find the cost of equity (Ke) and the cost of debt (Kd)
1. Ke can be found by using CAPM - Capital Asset Pricing Model.
CAPM Formula: Ke = Rf + b(Rm-Rf)
where Rf = Risk free rate; Rm = Return expected of the market; b = beta
Therefore = Ke = 3% + 0.9(11%-3%) = 10.2%
2. Kd = Coupon rate (1 - tax rate), coupon rate is 7%, tax rate is 35%
therefore Kd = 7 (1-0.35) = 4.35%
Lastly we apply the WACC Formula which is Ke* (equity value/Total value of equity and debt) + kd*(debt value/Total value of equity and debt)
We are not given the values of equity and debt, bur we are given the fractions; we will use the fractions.
Therefore: Ke* (equity value/Total value of equity and debt) + kd*(debt value/Total value of equity and debt) = (10.2%*85%)+(4.35%*15%) = 9.35%
Answer:
Explanation:
M1 and M2 are both definitions of money.
M1 refers to the most liquid cash which includes actual currency, checkable deposits and Traveler's checks.
M2 is M1 in addition to Savings deposits, time deposits and Money market funds
M1 = 724 + 638 + 7
= $1,369
M2 = 1,369 + 3,622 + 974 + 711
= $6,676
Answer:
Explanation:
Insurance protects people. Many federal government programs protect people from losses. So the government can be considered as offering insurance. For example workers pay into a program which will provide payments during emergencies. Another case is federal taxes which fund various financial assistance programs. In conclusion, the federal government provide "insurance" to people.
The answer is A welfare rules