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Svetradugi [14.3K]

3 years ago

9

Tim's employer offers him the option to buy 200 shares of the company for $250 a share. If the company has issued 40,000 shares,

what percentage of the company can Tim buy using his stock options?
Select the best answer from the choices provided.
8%
0.5%
0.0625%
0.025%

1 answer:

astra-53 [7]3 years ago

3 0

<span>simply divide 200/40000 and then multiply you will get...=0.5% option B..</span>

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Next to the following list of eight characteristics of business organizations, select a brief description of how each characteri

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Answer:

1. Owner authority and control - one vote per share, readily transferred

2 Ease of formation - requires government approval

3. Transferability of ownership - readily transferred

4. Ability to raise large amounts of capital - high ability

5. Duration of life - Unlimited

6. Owner liability - limited

7. Legal status - separate legal entity

8. Tax status of income - corporate income is taxed

Explanation:

A corporation is a business type :

1. Ownership of a corporation can be acquired by acquiring shares of the corporation.

2. A corporation requires government approval and a lot of legal requirements before it can be formed.

3. A corporation can raise capital through issuing shares, bonds and borrowing from financial institutions .

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6. A corporation is a separate legal entity.

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I hope my answer helps you

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3 years ago

Starset, Inc., has a target debt-equity ratio of 1.15. Its WACC is 8.6 percent, and the tax rate is 21 percent.

aev [14]

Answer:

a. 4.94%

b. 11.48%

Explanation:

Here in this question, we are interested in calculating the pretax cost of debt and cost of equity.

We proceed as follows;

a. From the question;

The debt equity ratio = 1.15

since Equity = 1 ; Then

Total debt + Total equity = 1 + 1.15 = 2.15

Mathematically ;

WACC = Cost of equity x Weight of equity + Pretax Cost of debt x Weight of debt x (1-Tax rate)

Where WACC = 8.6%

Cost of equity = 14%

Weight of equity = 1/(total debt + total equity) = 1/(1+1.15) = 1/2.15

Pretax cost of debt = ?

Weight of debt = debt equity ratio/total cost of debt = 1.15/2.15

Tax rate = 21% = 0.21

Substituting these values, we have;

8.6% = 14% x 1/2.15 + Pretax cost of debt x 1.15/2.15 x (1-21%)

8.6% = 14% x 1/2.15 + Pretax cost of debt x 1.15/2.15 x (1-21%)

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8.6% = Cost of equity x 1/2.15 + 6.1% x 1.15/2.15

Cost of equity = (8.6%-3.26279%)/(1/2.15)

Cost of equity = 11.48%

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