1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
irakobra [83]
2 years ago
10

Haslem, Inc. has 3 million shares of common stock outstanding, 1 million shares of preferred stock, and 80,000 bonds. The common

stock is selling for $50 per share, the preferred stock is selling for $33 per share, and the bonds are 25 year, 8.5%, $1,000 bonds that are presently selling for $1,080 (semiannual interest). The preferred stock pays an annual dividend of $2.70, and the common dividend paid in the year just ended was $2.40. The dividend on the common stock is projected to grow at a rate of 6% indefinitely
Business
1 answer:
Marysya12 [62]2 years ago
4 0

Answer:

8.37%

Explanation:

WACC = [E / (D + E)](Re) + [D / (D + E)](Rd)(1 - T)

E = market value of equity

D = market value of debt

Re = cost of equity

Rd = cost of debt

T = taxes

  • E = 3,000,000 common stocks x $50 = $150,000,000
  • DP = 1,000,000 preferred stock x $33 = $33,000,000
  • DB = 80,000 bonds x $1,080 = $86,400,000
  • Re = (dividend / stock price) + growth rate = ($2.4 / $50) + 6% = 0.048 + 6% = 0.108 or 10.8%
  • Rdp = $2.70 / $33 = 8.18%
  • Rdb = $85 / $1,080 = 7.87%
  • T = 33%

WACC = [E / (D + E)](Re) + [DP / (D + E)](Rdp)(1 - T) + [DB / (D + E)](Rdb)(1 - T)

since the numbers are too large, I will divide the calculation into three parts:

  • [E / (D + E)](Re) = [$150,000,000 / ($119,400,000 + $150,000,000)](10.8%) = ($150,000,000 / $269,400,000) x 10.8% = 0.5568 x 10.8% = 0.0601 or 6.01%
  • [DP / (D + E)](Rdp)(1 - T) = ($33,000,000 / $269,400,000) x 8.18% x (1 - 33%) = 0.1225 x 8.18% x 67% = 0.0067 or 0.67%
  • [DB / (D + E)](Rdb)(1 - T) = ($86,400,000 / $269,400,000) x 7.87% x 67% = 0.0169 or 1.69%

WACC = 6.01% + 0.67% + 1.69% = 8.37%

You might be interested in
"In the context of goal-setting theory, _____ is information about the quality or quantity of past performance and indicates whe
Bad White [126]

Answer: performance feedback

Explanation: Feedback on performance is a process of communication. It should be continuous as improvements are made on the basis of information exchanged between the manager and the subordinates. Regular follow-up dialogue should be in place to determine success.

Feedback is structured to see where things go right and where they go wrong. This suggests that leaders may need to be vigilant while they develop new behaviors and conquer the learning curves of new skills.

6 0
3 years ago
When you choose to live with a roommate on a collage campus, you can live there for free. True or False?
Sergeu [11.5K]

Answer:

False

Explanation:

You just split everything 50-50

5 0
3 years ago
Which of the following is the LEAST important consideration for safeguarding business assets? Options
Gnesinka [82]

Answer:

Out of the options listed the LEAST important consideration for safeguarding business assets is:

4) geography

Explanation:

Asset protection or safeguarding assets is the practice of covering the assets in case of a law sue, bankruptcy or another event that can generate that the owner of an asset lose them.

For this you must have a clear idea of what an asset is: an asset is a belonging whose ownership is entitled to a person. In this sense, bank accounts, apartments or houses, yates, cars, stocks, bonds are all examples of assets.

Nowadays there are several instruments in order to protect an asset: insurances, putting assets in the name of your spouse or a company. Regardless in the protection measure you use to cover your assets you must have clear, what is the type of asset you want to protect, the monetary value, and the physical size. but geography does not get to be an important consideration when safeguarding them.

6 0
2 years ago
The popularity of social media sometimes leads to a new stage in the hierarchy of effects known as ________ where loyal consumer
Mkey [24]

The popularity of social media sometimes leads to a new stage in the hierarchy of effects known as advocacy where loyal consumers recommend brands they have adopted.

the question is incomplete .please read below to find the missing content

The popularity of social media sometimes leads to a new stage in the hierarchy of effects known as ________ where loyal consumers recommend brands they have adopted.

Multiple Choice

evaluation

advocacy

preference

interest

repurchase

Advocacy is the activity of individuals or groups aimed at influencing decisions within political, economic, and social institutions. Advocacy Her group, for example, is a non-profit organization dedicated to helping women who have been victims of domestic violence and are afraid to speak up for themselves.

Advocacy includes promoting the interests or causes of someone or a group of people. An advocate is someone who advocates, endorses, or supports a cause or policy. Advocacy is also about helping people find their voice. There are three types of advocacy: self-advocacy, individual advocacy, and system advocacy.

Learn more about advocacy here

brainly.com/question/1086036

#SPJ4

4 0
1 year ago
Sascha is in a marching band. Because the band members move together identically, the audience perceives waves of motion. Sascha
nata0808 [166]

Answer: Common fate

Explanation:

The gestalt principle of common fate explains that objects moving in the same direction with a similar speed range, are observed as being part of one body.

Sascha's band director is making use of the gestalt principle of common fate to give the audience an illusion of waves of motion from the movement of the band members.

3 0
3 years ago
Other questions:
  • In the country of Lumberne, citizens campaigned against the sanction of a new factory that was about to be built in the vicinity
    10·1 answer
  • Neal joins Filestene Inc. as an executive designer. The HR manager informs him that he will have to join the labor union within
    7·1 answer
  • Campbell, a single taxpayer, earns $400,000 in taxable income and $2,000 in interest from an investment in State of New York bon
    9·1 answer
  • Assume that initially a country has a loanable funds supply curve of S1. Now, imagine that interest rates across the country inc
    10·1 answer
  • What are some ways you can 's protect yourself financially in today's digital world of online banking and shopping?
    6·1 answer
  • A company is going to be performing an initial offering. The offering will be limited to one state. The company has no intention
    5·1 answer
  • country cupboard purchased inventory for $ 4 comma 800 and also paid a $ 360 freight bill. Country Cupboard returned 20​% of the
    6·1 answer
  • PB6.
    14·1 answer
  • Organizations with low turnover and satisfied employees tend to perform better. On the other side of the coin, organizations hav
    14·1 answer
  • When reviewing the offering documents for a new issue, the FINRA Corporate Financing Department will only permit a new issue to
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!