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
Suppose there will be global catastrophe unless we hold total carbon dioxide emissions at or below 35 million tons per year. As
snow_tiger [21]

If 35 million tons of emissions permits are auctioned off, compared to each person getting 10 pounds of untradable emissions, it is a. better, because it lowers the cost of emissions abatement.

<h3>Why is it better?</h3>

If everyone got 10 pounds of untradable emission, the amount of emissions would be:

= (10 x 7 billion) / 2,000 pound per ton

= 35 million pounds

This is the same as the total amount of the emission permits but it is still more expensive than issuing permits because those permits are tradable.

Non-tradable permits will mean that some will exceed their permit and will be unable to share their emissions.

Find out more on emission permits at brainly.com/question/5130019.

8 0
2 years ago
In the _____________ model inflation is caused by owners of resources (including labor) increasing their prices that result in i
dimaraw [331]

Answer:

In the cost-push model inflation is caused by owners of resources (including labor) increasing their prices that result in increases in product prices throughout the economy.

Explanation:

Inflation is an increase in the price of goods and services caused by a number of factors in the economy. There are two major types of inflation models;

<em>1. Cost-push inflation</em>

A cost-push inflation is an increase in prices caused by an increase in the production cost. The increase in production cost can be caused by items such as; cost of labor, raw materials or resources that are useful in the manufacture or operation of other products. This increase in production cost in turn increases the product prices of its associated products.

<em>2. Demand pull inflation</em>

Demand pull inflation is an increase in prices caused by an increase in the demand for the product. When the consumer demand for a certain product increases, the price of the particular product also increases. This is majorly due to the fact that a high demand causes the available supply to diminish leading to limited resources. When the demand supersedes the supply, consumers are willing to pay higher for the product.

8 0
3 years ago
Retailing is composed of all of the business activities that add value to the products and services customers buy. This includes
ivolga24 [154]

Answer: Finance, purchasing, accounting, suppying

Explanation:

Retailing is known as a sub middleman in business that buys from the wholesaler and sells to the consumer in smaller quantity not as big as the wholesaler.

The following are activities of the retailer, although it might not be all followed by many retailers but depending on their ability and understanding

-Finance

-Purchasing

-Accounting

-Management Information System

-Supply management including warehouse and distribution management.

3 0
3 years ago
Bartering is the exchange of goods and services without the use of _____. A. revenue B. regulations C. money
katrin2010 [14]
Bartering is done without C) money!
Recall how pioneers traded with each other goods.
6 0
3 years ago
Read 2 more answers
You own a portfolio that has four stocks: A, B, C, and D. The portfolio has 50% of your money in stock A, 10% in B, 15% in C, an
Cerrena [4.2K]

Answer:

WB = BA(WA) + BB(WB) + BC (WC) + BD(WD)

               1.6 = 0.83(0.5) + 1.50(0.1) + 1.42(0.15) + BD(0.25)

               1.6 = 0.415 + 0.15 + 0.213 + 0.25BD

                1.6 = 0.778 + 0.25BD

             1.6-0.778 = 0.25BD

                 0.822  = 0.25BD

                     BD   = 0.822/0.25

                     BD = 3.288

Explanation: The question relates to Beta of a portfolio. The Beta of a portfolio is the aggregate of Beta of each stock multiplied by the weight of each stock. The Beta of stock D was not given, thus, it becomes the subject of the formula.

3 0
3 years ago
Other questions:
  • Rarely, the vintage date on a bottle of wine is not the same as the harvest year, but is the calendar year before the harvest ye
    12·1 answer
  • A company has $317,000 in credit sales. The company uses the allowance method of determining uncollectible accounts expense. The
    14·1 answer
  • The expected rate of return for a stock whose next dividend is "DIV1", that has a required rate of return "r" and expects to gro
    14·1 answer
  • According to the video, which terms best describe the role of General and Operations Managers? Check all that apply. documented
    9·2 answers
  • Which of the following statements about buying a franchise is most accurate?A) Franchisors are so closely regulated that there i
    5·1 answer
  • At Bargain Electronics, it costs $29 per unit ($20 variable and $9 fixed) to make an MP3 player at full capacity that normally s
    11·1 answer
  • In terms of managing social networks, organizational leaders should:
    15·2 answers
  • A company deposits $2,378 in a bank at the end of every year for 10 years. The company makes no deposits during the subsequent 5
    15·1 answer
  • Match each of the following phrases with the term it describes.
    14·1 answer
  • One of the four major time value of money terms; the amount to which an individual cash flow or series of cash payments or recei
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!