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OlgaM077 [116]
3 years ago
13

Healthy Snacks has a target capital structure of 60 percent common stock, 3 percent preferred stock, and 37 percent debt. Its co

st of equity is 16.8 percent, the cost of preferred stock is 11.4 percent, and the pretax cost of debt is 8.3 percent. What is the company's WACC if the applicable tax rate is 34 percent?
Business
1 answer:
Ivenika [448]3 years ago
5 0

Answer:

WACC = 12.45%

Explanation:

WACC= cost of equity * weight + cost of pref. equity * weight + cost of debt * weight * (1 - T)

WACC = 0.6 * 16.8 + 0,03 * 11.4 + 0,37 * 8.3 * (1 - 0,34)

WACC is the weighted average of the costs of the company, so it is necessary to multiply the weight of each source of capital (equity, preferred equity and debt) for its corresponding cost. Debt has a partiuclarity and is that it is before taxes so it becomes a tax shield for the company and taxes in fact reduce the cost of debt, for that reason we also multiply the cost of debt by  (1 - T)

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A small market orders copies of a certain magazine for its magazine rack each week. Let X 5 demand for the magazine, with pmf Su
Oksanka [162]

Answer:

See explanation below.

Explanation:

Let X the random variable that represent the demand for the magazine, the pmf for X is given by:

X       1            2           3          4        5        6      

P(X)  1/15      2/15       3/15     4/15   3/15     2/15

3 magazines

For this case the total spent is 2*3 = $ 6

And the net revenue for this case would be:

$4-$6 = -$2 , X=1 (demand 1)

$4*2-$6 = $2 , X=2 (demand 2)

$4*3-$6 = $6 , X=3 (demand 3)

For the values of X=4,5,6 the net revenue will be $6 since the number of magazines is 3

And the expected value for the net revenue would be:

E(R) = \frac{1}{15} *(-2) +\frac{2}{15} *(2) +\frac{3}{15}*(6) + \frac{4}{15}*(6) +\frac{3}{15}*(6) +\frac{2}{15}*(6) = \frac{74}{15}=4.93

4 magazines

For this case the total spent is 2*4 = $ 8

And the net revenue for this case would be:

$4-$8 = -$4 , X=1 (demand 1)

$4*2-$8 = $0 , X=2 (demand 2)

$4*3-$8 = $4 , X=3 (demand 3)

$4*4-$8 = $8 , X=4 (demand 4)

For the values of X=5,6 the net revenue will be $8 since the number of magazines is 4

And the expected value for the net revenue would be:

E(R) = \frac{1}{15} *(-4) +\frac{2}{15} *(0) +\frac{3}{15}*(4) + \frac{4}{15}*(8) +\frac{3}{15}*(8) +\frac{2}{15}*(8) = \frac{80}{15}=5.33

As as we can see we have a higher expected value for the case with 4 magazines.

5 0
3 years ago
A group of businessmen and women get together to try to solve the problem of decreased sales of their company's products. One of
Tems11 [23]

Answer:

The answer is brainstorming

Explanation:

6 0
3 years ago
If you were to start a business, which ownership form would you choose? What factors might affect your choice?
Ivenika [448]

Answer:

If I were to start a business, I will choose Sole Proprietorship.

Explanation:

Reasons why I will choose Sole Proprietorship

* I will be the sole owner and responsible for my business.

* All profits (and loss) will belong to me, means the more I work harder, the more return I (alone) will get.

* I can make all the decisions by myself, without the interference of any other person.

* I can expand my business as per my convenience and hard work, if I succeed I can eat all the fruits myself.

* I can grow my business as much I want.

* No one will be my boss, I will be setting my own working hours and work load etc.

8 0
3 years ago
Fill in the blank!! Many products, such as golf clubs, are made with graphite-epoxy resins because it's strong and lightweight.
TEA [102]
I think the answer is E. both supply and demand would increase.
I think this because the decrease in making would lower the price of the golf clubs. Therefore making people more likely to buy (demand increasing). The supply would also increase also because with a higher demand, the people buying the golf clubs would cause their supply of golf clubs to increase.
4 0
3 years ago
Please help me to solve this question.​
kari74 [83]

Answer:

  1. the reproduction in which fertilization takes place is called sexual reproduction.

ii . multiple fission

hope it is helpful to you

6 0
3 years ago
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