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Bingel [31]
3 years ago
6

The average of a company's cost of equity, cost of preferred, and aftertax cost of debt that is weighted based on the company's

capital structure is called the:
a. reward-to-risk ratio.

b. weighted capital gains rate.

c. structured cost of capital

d. weighted average cost of capital.
Business
1 answer:
kotykmax [81]3 years ago
3 0

Answer: Option D

                                         

Explanation: In simple words, weighted average cost of capital refers to the   amount of return that the investors of a company are expecting. It includes all the security holders of the company and calculates the rate as per the weights that are applicable in the target capital structure.

   Weighted average cost of capital is of high importance as it helps an organisation to clearly evaluate and analyze its current financial situation and if they need to change their existing capital structure.

A high WACC calls for higher profits as company has to make sure that security holders gets their returns and vice versa.  

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Match the economic scenario to the relevant characteristics. Increase in savings increase in unemployment more demand for funds
Elan Coil [88]

Answer:

Economic expansion

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The economy is expanding which means that people have access to higher wages. This will enable them to save more.

  • More demand for funds among borrowers

As the economy is expanding, people will borrow to consume more as well as to invest which will lead to a higher demand for borrowed funds.

  • Increase in price of products

With more people able to afford goods and services, prices will increase as there is now more demand for those goods.

Economic recession

  • Increase in unemployment

With the economy shrinking, companies will be making less profit and will have to layoff workers to reduce their costs.

  • Increase in government borrowing

In a recession, the Government will have to spend more to prop up the economy like the US Government did during this pandemic by providing stimulus packages. This spending is supported by borrowing.

3 0
2 years ago
Manufacturers use wholesalers and retailers becauseA. they have no other choice.B. they do not cost much.C. they create value fo
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Answer:  Option C

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Thus, the retailer is sued by manufacturer and wholesaler as they create value to the customer.

4 0
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