Suppose that there are five different lemonade stands in the same neighborhood

Bull City Industries is considering issuing a $100,000, 7% note to a creditor on account.

nignag [31]

Explanation:

......... ............n

8 0

3 years ago

The common stock of Serenity Homescapes has a beta of 1.21 and a standard deviation of 17.8 percent. The market rate of return i

3241004551 [841]

Considering the available information in the question, the cost of equity for this firm is "0.1566."

The cost of equity for the firm is expressed below:

RE = Rf + β × ( E (RM) − Rf );

Here, the RE is the

Rf => risk-free => 3.2 percent;

β => beta => 1.21;

E (RM) => market rate of return => 13.5 percent;

Thus, we have the following formula to compute:

RE = 0.032 + 1.21 × (0.135 − 0.032)

RE = 0.1566

Cost of equity is a term that is used I'm describing the rate of return firms need for business investment.

In another way, the Cost of equity depicts the rate of return that an individual needs for an equity investment.

Hence, in this case, it is concluded that the correct answer is "0.1566."

Learn more here: brainly.com/question/24242733

6 0

3 years ago

Turnbull Co. has a target capital structure of 45% debt, 4% preferred stock, and 51% common equity. It has a before-tax cost of

Katarina [22]

Answer:

By raising additional funds from issuing additional equity common stock ,WAAC increases by 1.07%

Explanation:

WACC=Ke*E/V+Kp*P/V*Kd*D/V*(1-t)

WACC when additional funds is raised from retained earnings:

Ke is the cost of equity is 14.7%

Kd is the cost of debt is 11.1%

Kp is the cost of preferred stock 12.2%

E=equity weight of 51% 0.51

P= preferred stock weight 4% 0.04

D=debt weight 45% 0.45

V=debt+equity+preferred stock weights

V=0.51+0.04+0.45=1

t is the tax rate at 25% 0.25

WACC=14.7%*0.51/1+12.2%*0.04+11.1%*0.45*(1-0.25)

=(14.7%*0.51)/1+(12.2%*0.04)+(11.1%*0.45*0.75)

=11.73%

WACC when additional funds is raised from common equity capital

Ke is the cost of equity is 16.8%

Kd is the cost of debt is 11.1%

Kp is the cost of preferred stock 12.2%

E=equity weight of 51% 0.51

P= preferred stock weight 4% 0.04

D=debt weight 45% 0.45

V=debt+equity+preferred stock weights

V=0.51+0.04+0.45=1

t is the tax rate at 25% 0.25

WACC=16.8%*0.51/1+12.2%*0.04+11.1%*0.45*(1-0.25)

=(16.8%*0.51)/1+(12.2%*0.04)+(11.1%*0.45*0.75)

=12.80%

By raising additional funds from issuing additional equity common stock ,WAAC increases by 1.07% (12.80%-11.73%)

8 0

4 years ago

- In dealing with the U.S. government, the two key responsibilities of the Fed are lending money

Fittoniya [83]

In dealing with the Federal reserve, the key responsibilities of the Fed are lending money to the government and formulating monetary policies.

The federal reserve of the United states is what acts as the central bank of the country. The Feds helps to

Regulate the money supply that is in the country
Regulate the operations of banks
Establish monetary policies.

The board of governors in the banks help to study the current issues that are existent in the economy, then they formulate the adequate policies that would help to take care of the issues.

5 0

3 years ago

Mika has borrowed $5,000 from her cousin Jun and not repaid it. Now, Mika is selling her house to Jun’s nephew, Cheong. As Mika

hram777 [196]

Answer:

Jun's pressure and influence has invalidated Mika's consent.

Explanation:

By threatening Mika with prosecution if she doesn't set a discount for the sale of her house on the grounds of her debt to her, she has influenced Jun's consent or rather coerced it and therefore Mika's consent is invalidated in the agreement. Consent is free under law if contract and should be given under undue influence, duress or any other vitiating factor that will render the contract null and void such as the example above

3 0

4 years ago