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disa [49]
3 years ago
8

Suppose that Taggart Transcontinental currently has no debt and has an equity cost of capital of 10%. Taggart is considering bor

rowing funds at a cost of 6% and using these funds to repurchase existing shares of stock. Assume perfect capital markets. If Taggart borrows until they achieved a debt -to-value ratio of 20%, then Taggart's levered cost of equity would be closest to:A) 8.0%B) 9.2%C) 10.0%D) 11.0%
Business
1 answer:
labwork [276]3 years ago
8 0

Answer:

Option (D) is correct.

Explanation:

We have to use MM proposition that cost of equity will change itself in such a manner so that it can take care of its debt.

Cost of equity:

= WACC of all equity firm + (WACC of all equity - Cost of debt ) × (Debt -to-equity ratio)

At the beginning, when there was no debt,

WACC = cost of equity = 10%

Levered cost of equity:

= 10% + ( 10% - 6%) × 0.2

= 10.8%

Therefore, Taggart's levered cost of equity would be closest to 11%.

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A reduction in the saving rate starting from a steady state with more capital than the golden rule causes investment to?
Studentka2010 [4]

Starting from a steady state with greater capital than the Golden Rule, a decrease in the saving rate results in a decline in investment.

<h3>What is the definition of the golden rule?</h3>

The Golden Rule instructs people to make decisions for others based on their own personal preferences. Putting yourself in another person's shoes or "doing unto others as you would have them do unto you" are two common definitions of the Golden Rule (Baumrin 2004).

The golden rule would advise us to release someone who has been convicted of a crime and given a prison sentence, for instance, because we would not want to go to prison ourselves. This holds true even if we use the platinum rule because it's likely that the prisoner would choose to stay out of jail or prison.

To learn more about Golden Rule, refer to:

brainly.com/question/16313509

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8 0
2 years ago
Joe, a human resources specialist for Jersey Office Supplies Co., rides along with the furniture delivery people to observe the
Svetllana [295]

Complete question:

Joe, a human resources specialist for Jersey Office Supplies Co., rides along with the furniture delivery people to observe the problems they were encountering and what activities they were required to perform. Joe was performing a:

A. personality test

B. performance appraisal

C. BARS

D. job analysis

Answer:

Joe was performing a job analysis

Explanation:

Job analyzes are a set of protocols for defining the contents for the job and the features or criteria required for the execution of the tasks. Job analytics provide employers with knowledge that helps to recognize which personnel is ideally suited to particular work.

An example of a job analysis model might list tasks or activities of the job and determine each performance level. Within this way, the role of job analysis is critical. Many companies typically take the same generic approach without details on the task description. All workers are tested in a similar set of features or characteristics presuming that they are required for all work.

6 0
3 years ago
The Bonsai Nursery Corporation has $1,000 par value bonds with a coupon rate of 8% per year making semiannual coupon payments. I
nignag [31]

Answer:

9.78%

Explanation:

The yield to maturity can be determined using the rate formula in excel as shown below:

=rate(nper,pmt,-pv,fv)

nper is number of times coupon interest would be paid,which is 12 years multiplied by 2(semi-annual interest payment) i.e 24

pmt is the semi-annual interest which is $1000*8%/2=$40

pv is the current price of the bond at $876.40

fv is the face value of the bond which is $1000

=rate(24,40,-876.40,1000)=4.89%

Semi-annual yield is 4.89%

Annual yield is 4.89%*2=9.78%

The yield to maturity on these bonds is approximately 9.78%

6 0
3 years ago
Zoom In, Inc. is engaged in the business of coding, with an emphasis on Internet marketing, business apps, and intra-corporate n
-BARSIC- [3]

Answer:

Option A. The U.S. Constitution.

Explanation:

The reason is that the US constitution provides the basic framework for the laws to be formulated and passed both in the US National Assembly and the Senate. The laws cannot be formulated if the US constitution doesn't allows the passing of the law which means that the constitution must be amended first. When the slavery was to be eliminated in 1865, the first problem was that passing the elimination of slavery law was inconflict with the US constitution. So the constitution was amended before passing the law to eliminate the conflict.

In the nutshell, every law originates because of different reasons like Technological reasons, Social reasons, Cultural reason, etc) but the basis remains the same which is US constitution which is the basic framework for passing the law.

8 0
3 years ago
_____ involves comparing the percentage of minorities and the percentage of women employed in each job category to the availabil
lisov135 [29]

Answer:

The correct answer is letter "A": Job group analysis.

Explanation:

Job group analysis is the evaluation carried out by a company to determine the amount of workforce available and the number of job positions required to cover the operations expected. Besides, it considers the diversity present among existing employees based on <em>age, race, gender or ethnicity</em> to mention a few examples.

3 0
3 years ago
Read 2 more answers
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