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
NNADVOKAT [17]
3 years ago
13

The calculation of WACC involves calculating the weighted average of the required rates of return on debt, preferred stock, and

common equity, where the weights equal the percentage of each type of financing in the firm’s overall capital structure. is the symbol that represents the before-tax cost of debt in the weighted average cost of capital (WACC) equation. Avery Co. has $1.4 million of debt, $1.5 million of preferred stock, and $2.1 million of common equity. What would be its weight on common equity? 0.42 0.28 0.33 0.27
Business
1 answer:
Mars2501 [29]3 years ago
4 0

Answer:

The weightage of common equity will be 0.42

Explanation:

The weight of each component of financing to the firm is calculated by taking the market value of each component and dividing it by the total market value of the assets of the firm. Where assets = debt + equity

The total assets or value of capital structure for the firm is,

Assets = 1.4 + 1.5 + 2.1  = $5 million

The weightage of common equity in the capital structure is, 2.1 / 5  =  0.42 or 42%

You might be interested in
________ describes the net present value of the stream of future profits expected over the customer's lifetime purchases.
Readme [11.4K]

Customer lifetime value basically describes the net present value of the stream of future profits expected over the customer's lifetime purchases.

<h3>What is Customer lifetime value?</h3>

Customer lifetime value can likewise be characterized as the financial value of a customer relationship, in light of the current value of the extended future incomes from the customer relationship.

The motivation behind the customer lifetime value metric is to evaluate the monetary value of every customer. Wear Peppers and Martha Rogers are cited as saying, "a few customers are more equivalent than others."

Customer lifetime value varies from customer benefit or CP (the contrast between the incomes and the expenses related with the customer relationship during a predetermined period) in that CP estimates the past.

Therefore it is the Customer lifetime value which denotes the net value for future profits.

Learn more about Customer lifetime values here:

brainly.com/question/2629574

#SPJ4

5 0
2 years ago
Ace Corporation engaged Kosier, CPA, to perform a consulting engagement. While driving to Ace's office, Kosier was involved in a
Keith_Richards [23]

Answer:

The correct answer is B. Correct! Since Ace is not in control of the actions of Kosier (an independent contractor), Ace would  generally not be responsible for Kosier's torts.

Explanation:

An independent contractor is a person who is hired to do a specific job. It is said that she is her own boss because she controls how and where the work is done.

These people have greater freedom and only undertake to perform the specific function they agreed with the person owning a company. For example, the independent contractor agrees that he will serve clients at a 9 a.m. store. at 1 p.m. or that he will go to the meetings and prepare a report on the subject assigned to him. Outside these specific functions, the independent contractor controls how he manages his time.

5 0
3 years ago
Hadley, Inc. manufactures a product that uses $18 in direct materials and $5 in direct labor per unit. Under the traditional cos
Rama09 [41]

Answer:

Total Manufacturing cost per unit is $53

Explanation:

Manufacturing cost is the cost used to manufacture a product, both direct and indirect cost incurred in manufacturing process are included. It is the total value of material cost, labor cost and overhead cost.

Direct Material Cost = $18

Direct Labor cost  = $5 per hour

Manufacturing overhead applied = $13 per unit

Total Activity rate = $30

Activity based costing is the method of allocation of overhead to the products / department / projects on the basis of uses of activity by each one.As we know that calculating an activity rate which is similar to predetermined overhead rate.

Total Manufacturing Cost = Direct material cost + Direct Labor cost + Manufacturing overhead cost

As we know that calculating an activity rate which is similar to predetermined overhead rate. so the activity rate will be used for overhead expense.

Total Manufacturing Cost = $18 + $5 + $30 = $53 per unit

6 0
3 years ago
The Inferior Goods Co. stock is expected to earn 13% in a recession, 7% in a normal economy, and lose 6% in a booming economy. T
Natalka [10]

Answer:

Ans. The expected rate of return on the Inferior Goods Co. stock is 5.90%

Explanation:

Hi, you just have to multiply the expected earnings by the probability of occurance of a certain event and then add up all the products. Here is the information all organized to be processed.

Item                  Prob Earn

Booming           20% -6%

Normal           55% 7%

Recession   25% 13%

Ok, now let´s calculate the expected rate of return.

ExpectedReturn=(0.2*(-0.06))+(0.55*0.07)+(0.25*0.13)

ExpectedReturn=-0.012+0.039+0.033=0.059

So the expected rate of return of the stock is 5.90%

Best of luck.

8 0
3 years ago
Pressure from consumer groups is encouraging some producers to develop more ______________ products. deficient. desirable. accep
klio [65]
Pressure from consumer groups is encouraging some producers to develop more desirable products.  The desirable products are products that take care of both the objectives are called desirable products. For example, body shop products are named desirable products because they offer short term gratification and also support the society.
6 0
3 years ago
Other questions:
  • A sales tax, especially when food and medicine are subject to the tax, can be described as what type of tax?
    8·1 answer
  • NAME ONE ORGANIZATION THAT CAN HELP A NEW ENTREPRENEUR WITH FUNDING AND SKILL DEVELOPMENT SOUTH AFRICA
    15·1 answer
  • Wu Systems has the following balance sheet. Assume that all current assets are used in operations. How much net operating workin
    10·2 answers
  • Korte Company reported the following information for 2014:
    8·1 answer
  • If a shortage exists in the market, the invisible hand will manipulate prices to maintain equilibrium by increasing prices and t
    11·1 answer
  • Ted owns a small florist shop. Since his business is booming, his realizes he will soon need one more delivery van. He decides h
    6·1 answer
  • On January 1, 2021, Splash City issues $320,000 of 8% bonds, due in 15 years, with interest payable semiannually on June 30 and
    10·1 answer
  • Excess supply is created when price or move away from the equilibrium point.
    15·2 answers
  • Ivan is the founder of a firm producing self-driving vehicles. Because the industry is so new and chaotic, Ivan favors a top-dow
    8·1 answer
  • You have decided it’s time to buy a house, and you have found the one you want. The price is $500,000, and you will pay 10% in
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!