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kodGreya [7K]
3 years ago
14

Assume that the firm is 40% financed by debt and 60% financed by equity. Its cost of debt is 8% and the cost of equity is 15%. T

he tax rate is 40%. What is the firm’s WACC?
Business
1 answer:
Bad White [126]3 years ago
3 0

Answer:

10.92%

Explanation:

A firm is 40% financed by debt

= 40/100

= 0.40

The firm is also 60% financed by equity

= 60/100

= 0.60

Its cost of debt is 8%

=8/100

=0.08

Cost of equity is 15%

= 15/100

= 0.15

Tax rate is 40%

= 40/100

= 0.40

Therefore, the firm's WACC can be calculated as follows

WACC= 0.40×0.08×(1-0.40) + 0.60×0.15

= 0.032×0.6 + 0.09

= 0.0192 + 0.09

= 0.1092×100

= 10.92%

Hence the firm's WACC is 10.92%

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Answer:

b.$296,500.

Explanation:

Calculation to determine what Greene should report as unamortized bond discount

First step is to calculate the discount amount

Discount Amount= ($5,000,000 × .09) - ($4,685,000 × .10)

Discount Amount= $18,500

Now let determine the unamortized bond discount

Unamortized bond discount=$315,000 - $18,500 Unamortized bond discount= $296,500

Therefore Greene should report unamortized bond discount of $296,500

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When you purchase an item in a store, you may be charged __________.
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Answer:

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Explanation:

Price Elasticity of Supply is sellers' quantity supplied response to price change. P(Es) = % change in supply / % change in price.

Supply can be classified by Price Elasticity of Supply, as undermentioned :

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