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monitta
3 years ago
5

Serendipity Inc. is re-evaluating its debt level. Its current capital structure consists of 80% debt and 20% common equity, its

beta is 1.60, and its tax rate is 25%. However, the CFO thinks the company has too much debt, and he is considering moving to a capital structure with 40% debt and 60% equity. The risk-free rate is 5.0% and the market risk premium is 6.0%. What's the firm's new cost of equity under 40% debt?
Business
1 answer:
Dmitriy789 [7]3 years ago
8 0

Answer:

8.76%

Explanation:

Using the CAPM formula:

Ke = Rf + Beta Factor * Risk premium

Here

Rf is 5%,

Beta Factor is 1.6

And

Risk Premium is 6%

By putting values, we have:

Ke = 5% + 1.6 * 6%

Ke = 14.6%

Now we will find new firm's cost of equity under 40% debt by simply multiplying it with the equity percentage:

Weighted Cost of Equity = 14.6% * 60% = 8.76%

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Universal Containers wants to provide a more consistent service experience to its customers and is evaluating the Service Cloud
LuckyWell [14K]

Answer:

B. Publisher Actions used in the macros must be on the page layout.

C. The macros widget or utility must be added to the console

D. The run Macros permission must be granted to users.

Explanation:

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7 0
2 years ago
Livingston Co. uses process costing to account for the production of elastic bands. Direct materials are added at the beginning
madam [21]

Answer:

The total cost per unit using the weighted average method would be:

$15,97  

Explanation:

                Materials   Conversion Costs  

Begining  $ 14,000         $ 8,000  

APRIL          $ 72,000        $ 80,000  

TOTAL          $ 86,000 $ 88,000  

Units               8,000   8,000  

                       100% 50%  

WIP                4,000   2,000  

TOTAL              12,000   10,000  

USD/Unit          7,17              8,80   $15,97  

3 0
3 years ago
What is the first thing you should do when a customer requests a sale item once you’ve determined that item is out of stock? Tel
ipn [44]

Answer:

Tell the customer when you store’s next delivery day is and to come back then Issue the customer a raincheck for the item that is out of stock

Explanation:

Customer<em> retention</em> is important as well as <em>meeting their specific needs</em>. It is unwise to turn back a customer and refer them to a competitor, this may mean loss of business (currently and in the future). Also it is unwise to offer a substitute item as this will not meet their needs (though you may want to inform them of the substitute item if they are interested).  Issue the customer a raincheck for the item that is out of stock is the best way to go and keep the business.

7 0
3 years ago
When conducting a SWOT analysis, in what phase of the strategic marketing process is an organization presently engaged?
Marysya12 [62]

Answer:

Planning Phase

Explanation:

Strategic marketing process deals with planning to develop and to implement operations so as to attain a competitive edge  in the market over competitors.

The aspect of strategic management process that deals with conducting SWOT analysis is the planning phase it is the first phase and a very important phase in  strategic marketing. It is the phase that assess the strength of the organisation, its weakness, its opportunity as well as the threat that it might face when trying to achieve its goals.   This process requires an organisation to conduct a SWOT analysis, set marketing goals, determine how to manage the four p's among other things.  

8 0
3 years ago
Suppose an investment offers to triple your money in 48 months (don't believe it). Required: What rate of return per quarter are
Daniel [21]

Answer:

Rate of return per quarter = 7.11%

Explanation:

<em>The rate of return is the percentage return  earned  if compounding  is done quarterly. It can be worked as follows:</em>

r= (FV/PV - 1)- 1× 100

r- rate of return

FV= Future value of the investment after 48 months

PV= Amount invested now

Let the amount invested i.e PV be 10.

If the investment is tripped, the sum earned would be 3×10 = 30

DATA

FV- 30

PV- 10

n-48/3= 16

r= ?

r = ((30/10)^1/16 -1 )× 100

r= 7.1075  × 100 = 7.11%

r= 7.11%

Rate of return per quarter = 7.11%

3 0
3 years ago
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