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
DanielleElmas [232]
3 years ago
14

ABC Corporation has the following information: Total market value of a company’s stock: $650 million Total market value of the c

ompany’s debt: $150 million Cost of Equity: 10% Cost of Debt: 8% Corporate tax rate is 35 percent What is the WACC of ABC Corporation?
Business
1 answer:
Jobisdone [24]3 years ago
7 0

Answer:

WACC of ABC Corporation is 91%

Explanation:

WACC = Kd * (1+T) * Debt/Debt+Equity + Ke * Debt/Equity

Kd = Cost of debt

T = Corporate tax rate

WACC = 0.08*(1-0.35)*(150m/150m+650m) + 0.10*(650m/150m+650m)

WACC = 0.08 *0.65*0.1875 + 0.10*0.8125

WACC = 0.00975 + 0.08125

WACC = 0.091

WACC = 91%

Therefore, the WACC of ABC Corporation is 91%

You might be interested in
The Food and Drug Administration (FDA) announced yesterday that they would approve a new cancer-fighting drug from Pharma Compan
Julli [10]

Answer:

the approval was already anticipated by the market

Explanation:

This abnormal return of 0% suggests that the approval was already anticipated by the market. Meaning that the price of the Pharma company's stock had already been affected by the speculation previously and when the FDA made the announcement investors had already made their move in the market with regards to Pharma's stock. Thus causing no further move and a return of 0% to occur.

5 0
3 years ago
The four career pathways in finance are?
kondaur [170]

The four career pathways in the finance cluster are banking and related services, business financial management, financial and investment planning, and insurance services.

3 0
3 years ago
An employee that has integrity is
damaskus [11]

Explanation:

Integrity is the quality of having strong ethical or moral principles and following them at all times, no matter who's watching. A person with integrity acts with honesty, honor, and truthfulness.

5 0
2 years ago
_____ involves changing the size of the opportunity by identifying and maximizing key drivers of the positive risk
Ne4ueva [31]
The answer would be Risk Enhancement

3 0
2 years ago
U.s lifestyle shifts have expanded which of the following careers
alexdok [17]
US lifestyle shifts have expanded the careers for "daycare providers", since many more women have joined the work force in the past two decades--meaning that they can't be at home with their children. 
6 0
2 years ago
Other questions:
  • In ______, the organization is either trying to get people inside the company to apply for different job openings or to get outs
    9·1 answer
  • you are invited to play the following game: an urn holds two white and three black balls, and you draw three balls randomly. If
    10·1 answer
  • The units of an item available for sale during the year were as follows: Jan. 1 Inventory 2,500 units at $5 Feb. 17 Purchase 3,3
    9·1 answer
  • What is an investment report that is given to potential investors called
    5·1 answer
  • The local convenience store advertises 50% off frozen slushies. As a result of the sale, the store sells 80% more slushies, but
    11·1 answer
  • Tri Fecta, a partnership, had revenues of $362,000 in its first year of operations. The partnership has not collected on $46,400
    14·1 answer
  • National saving is made up of two components: public saving and private saving. National income/output (Y), private consumption
    15·1 answer
  • Learning: Share 2 main things you learned about communications in Module 2.
    14·1 answer
  • What does predatory pricing involve?
    10·1 answer
  • Hal has just graduated from four years of college. For the last two years, he took out a Stafford loan to pay for his tuition. E
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!