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DerKrebs [107]
3 years ago
7

For a typical firm, which of the following sequences is CORRECT? All rates are after taxes, and assume that the firm operates at

its target capital structure. (rs=return on equity, cost of equity; rd=return on debt, cost of debt; WACC=weighted avg. cost of capital)
A) rs > rd > WACC.

B) rs > WACC > rd.

C) WACC > rs > rd.

D) rd > rs > WACC.
Business
1 answer:
Temka [501]3 years ago
6 0

Answer:

B) rs > WACC > rd.

Explanation:

The formula to compute WACC is shown below:

= Weightage of debt × cost of debt × ( 1- tax rate) + (Weightage of preferred stock) × (cost of preferred stock) + (Weightage of  common stock) × (cost of common stock)

As we know that the risk of equity in comparison to debt is more. And the return in respect of equity is received as an interest whereas for the debt it is received as a dividend.  

And, The WACC has come between debt and equity

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A bank has total interest income of $67 million and total noninterest income of $14 million. This bank has total interest expens
tresset_1 [31]

Answer:

$32 million

Explanation:

Data provided in the question:

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Now,

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7 0
3 years ago
___ are poorly trained and inadequately managed employees who mean well but have the potential to cause much damage.
madam [21]

Answer:

Negligent insider.

Explanation:

<u>Negligent insider</u> are poorly trained and inadequately managed employees who mean well but have the potential to cause much damage.

Negligent insiders are the employees who are given access to the organization network. They are the ones who unintentionally make an error with the security privacy or due to their negligence they get trapped in phishing emails, risky websites, leakage of the company´s confidential data, etc. These mistakes cause a big loss to the company and these insiders turn out to be a threat to the organization. The company needs to strategies on how to mitigate these threats. They can mitigate these issues by properly training and controlling the accessibility of employees.

3 0
3 years ago
Cogswell Corporation is considering how to price their patented mega-cogs. It knows that if it prices each widget at $50 then th
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Answer: $25

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Total revenue, at price = $50

Total revenue = price × units sold

                       = $50 × 0

                       = 0

Total revenue, at price = $45

Total revenue = price × units sold

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Total revenue, at price = $40

Total revenue = price × units sold

                       = $40 × 2

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Total revenue, at price = $35

Total revenue = price × units sold

                       = $35 × 3

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Marginal revenue of third unit = \frac{Change\ in\ total\ revenue}{change\ in\ units\ sold}

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