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zavuch27 [327]
3 years ago
9

Deep Mines has 43,800 shares of common stock outstanding with a beta of 1.54 and a market price of $51 a share. There are 10,000

shares of 7 percent preferred stock outstanding with a stated value of $100 per share and a market value of $83 a share. The 8 percent semiannual bonds have a face value of $1,000 and are selling at 96 percent of par. There are 5,000 bonds outstanding that mature in 13 years. The expected market rate of return is 7.5 percent, risk-free rate is 3.6 percent, and the tax rate is 21 percent. What discount rate should the firm apply to a new project's cash flows if the project has the same risk as the company's typical project? a. 9.3%. b. 8.4%. c. 7.7%. d. 10.7%.
Business
1 answer:
stellarik [79]3 years ago
5 0

Answer:

A. 9.3%

E = 43,800 ($51) = $2,233,800

P = 10,000 ($83) = $830,000

D = 5,000 ($1,000) (0.96) = $4,800,000

V = $2,233,800 + 830,000 + 4,800,000

V = $7,863,800

RE = 0.036 + 1.54 (0.075)

RE = 0.1515

RP = [0.07 ($100) ] / $83

RP = 0.0843

RD = 0.96 ($1,000) = [0.08 ($1,000) / 2] [(1 − {1 / [1 + (r / 2)] 13 (2) / (r / 2)] + $1,000 / [1 + (r/2) ] 13 (2)

RD = 0.0851

WACC =

($2,233,800 / $7,863,800) (0.1515) + ($830,000 / $7,863,800) (0.0843) + ($4,800,000 / $7,863,800) (0.0851) (1 − 0.21)

WACC =

0.0930, or 9.30%

Explanation:

MV of Equity = Price of Equity * Number of Shares Outstanding MV of Equity

$51 * 43,800 = 2,233,800 MV of Bond =

Par Value * Bonds Outstanding * % Age of Par MV of Bond =

$1,000 * 5,000 * 0.96 = 4,800,000 MV of Preferred Equity

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<h2>Answer</h2>

Technology

<h3>Explanation</h3>

Outsourcing and telecommuting are the trends related to presence of growing technology within the economy allowing various services to be outsourced to people who are more of an expert when it comes to handling those procedures. Overall, these trends are mainstream nowadays and allow businesses to succeed in an articulate manner together with allowing tertiary industry to thrive

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Explanation of the fair trade logo​
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5 0
3 years ago
Scarbrough Corp. factored $600,000 of accounts receivable to Duff Corp. on October 1, year 2. Control was surrendered by Scarbro
Virty [35]

Answer:

Scarbrough will receive and record cash of $538,685

The journal entry to record this transaction would be:

                             Debit        Credit  

Cash                 $2,900,300  

Interest Expense $89,700  

Notes Payable                 $2,990,000

Debit Cash for $2900300, debit Interest Expense for $89700, and credit Notes Payable for $2990000

Explanation:

In order to calculate the amount Scarbrough will receive and record cash we would have to make the following calculation:

Scarbrough will receive and record cash=Receivables-Amount of the hold back-Withheld as fee income-Less: Withheld as interest expense

Receivables= $600,000  

Amount of the hold back=$600,000 x 5%=$30,000  

Withheld as fee income=$600,000 x 3%=$18,000  

Withheld as interest expense=$600,000 × 15% × 54/365=$13,315  

Therefore, Scarbrough will receive and record cash=$600,000- $30,000-$18,000-$13,315=$538,685

Scarbrough will receive and record cash of $538,685

According to the given data to journal entry to record this transaction would be the following:

 

                              Debit        Credit  

Cash                 $2,900,300  

Interest Expense $89,700  

Notes Payable                 $2,990,000

Interest Expense=$2,990,000 x 3%=$89,700

5 0
3 years ago
If $ 9 comma 000 is invested in a certain business at the start of the​ year, the investor will receive $ 2 comma 700 at the end
Marianna [84]

Answer:

PV= $9,355.78

Explanation:

Giving the following information:

If $ 9,000 is invested in a certain business at the start of the​ year, the investor will receive $ 2,700 at the end of each of the next four years.

Interest rate= 6%.

First, we need to find the final value

FV= {A*[(1+i)^n-1]}/i

A= payment

FV= {2,700*[(1.06^4)-1]}/0.06= 11,811.46

Now, we calculate the present value:

PV= FV/(1+i)^n

PV= 11,811.46/1.06^4= $9,355.78

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3 years ago
Hey! I need definitions to the following.
kap26 [50]

Answer:

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Justice - just behavior or treatment

Courage - the ability to do something that frightens one

Perseverance - persistence in doing something despite difficulty or delay in achieving success

Loyalty - a devotion and faithfulness to a nation, cause, philosophy, country, group, or person

Commitment - the state or quality of being dedicated to a cause, activity, etc.

Pride - a feeling of deep pleasure or satisfaction derived from one's own achievements

Conviction - the verdict that usually results when a court of law finds a defendant guilty of a crime

Responsibility - the state or fact of having a duty to deal with something or of having control over someone

Self-Discipline - the ability to control one's feelings and overcome one's weaknesses

Compassion - sympathetic pity and concern for the sufferings or misfortunes of others

Humility - the quality of being humble

Vitality - the state of being strong and active; energy

Dedication - the quality of being dedicated or committed to a task or purpose

Assertiveness - confident and forceful behavior

Fidelity - faithfulness to a person, cause, or belief, demonstrated by continuing loyalty and support

Forgiveness - the action or process of forgiving or being forgiven

Integrity - the quality of being honest and having strong moral principles; moral uprightness

Respect for Authority - to feel or show esteem, honor, and appreciation for

Etiquette - the customary code of polite behavior in society or among members of a particular profession or group

Work - activity involving mental or physical effort done in order to achieve a purpose or result

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Explanation:

I mean, you could have just searched it up :D

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