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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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yanalaym [24]

Answer: a) Fuel Connector's place of business.

Explanation:

Since Go-Flo is expected to pick up the goods from Fuel Connector Products, Inc., therefore, Go-Flo should pick up the the hose couplings and fittings from Fuel Connector's office. Also, since the contract does not specify a place so its only logical that Go-Flo would have to go to Fuel Connector's place of business.

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3 years ago
James purchased liability insurance with a $100,000 limit from insurer A. To add more coverage, he bought a second liability pol
padilas [110]

Answer:A. $24,000

B. 36,000

Explanation:

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8 0
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By making prostitution legal <span />
8 0
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How can expectations about the future change consumer behavior?
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Suppose the governments of two different economies, economy A and economy B, implement a permanent tax cut of the same size. Inv
timama [110]

Available Options Are:

a) higher sensitivity to changes in the interest rate, or

b) lower sensitivity to changes in the interest rate

Answer:

Option A. Higher sensitivity to changes in the interest rate

Explanation:

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