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noname [10]
3 years ago
10

. El Capitan Foods has a capital structure of 36% debt and 64% equity, its tax rate is 35%, and its beta (leveraged) is 1.4. Bas

ed on the Hamada equation, what would the firm’s beta if it used no debt, i.e. what is its unleveraged beta?
Business
1 answer:
almond37 [142]3 years ago
5 0

Answer:

The firm's unleveraged beta is 1.0251

Explanation:

Hamada's equation  is used to separate the financial risk of a levered firm from its business risk.

The Hamada equation:

Bu= Bl/(1 + (1 − T)(D/E))

Bl = 1.4

wd = 0.36

Tax rate = 35%

D/E = wd / (1 – wd) = 0.5625 = 56.25%

= 1.4/ (1+(1-0.35)(0.5625))

=1.4/ 1 + (0.65)(0.5625)

=1.4/1.36

= 1.0251

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Which procedure would be of most assistance to an auditor discovering a large credit sale that has erroneously been recorded twi
koban [17]

Answer:

B. Sending accounts receivable confirmations.

4 0
3 years ago
AJ Manufacturing Company incurred $54,000 of fixed product cost and $43,200 of variable product cost during its first year of op
kvv77 [185]

Answer:

Explanation:

The preparation of the income statement is presented below using the generally accepted accounting Principles (GAAP) :

Sales $176,000

Less: Cost of goods sold ($97,200)         ($54,000 + $43,200)

Gross margin $78,800

Less: Selling and administrative cost ($31,000)    ($17,200 + $13,800)

Net income $47,800

Hence, we considered all the given information

8 0
2 years ago
Total transaction costs, based on the assumptions provided, are expected to be:
Jobisdone [24]

Based on the costs of acquisition of Walmart by Amazon, the total transaction costs would come to B. $22,002.

<h3 /><h3>What are the total transaction costs?</h3>

Equity financing cost:

= 5.5% x 241,350.75

= $13,274.29

Debt financing cost:

= 1.5% x 241,350.75

= $3,260.26

Other transaction costs:

= $3,000

Target debt redemption premium:

= 70,242 x 3%

= $2,107.26

The total transaction costs are:

= 13,274.29 + 3,260.26 + 3,000 + 2,107.26

= $22,002

Find out more on acquisition costs at brainly.com/question/14300655

#SPJ1

8 0
1 year ago
Kray Inc., which produces a single product, has provided the following data for its most recent month of operations: Number of u
Allushta [10]

Answer:

The variable costing unit product cost was <u>$69.</u>

Explanation:

Variable Product Costing is a situation whereby only the variable costs of production is taking into account to estimating the cost per unit of a product. This implies that none of the fixed cost will be included in the cost of the product.

Based on the explanation above, the variable costing unit product cost to produce a single product by Kray Inc. can be calculated as follows:

Kray Inc.

Calculation of Variable Costing Unit Product Cost

<u>Particulars                                                          Amount ($)     </u>

Direct materials                                                        40

Direct labor                                                               19

Variable manufacturing overhead                           8

Variable selling and administrative expense     <u>     2      </u>

Variable cost per unit                                          <u>     69     </u>

Therefore, the variable costing unit product cost was <u>$69.</u>

5 0
2 years ago
Emily wants to search online for entrepreneurship opportunities in the field of business development. However, she wants to skip
jeka94

Answer:

C.

“entrepreneurship + business + development - branding”

Explanation:

Researchers usually put a hyphen before a word as a technique to exclude it from online search results. This method allows for narrowing down results to the desired pages only.  When searching for keywords that are frequently used together,  putting a hyphen helps exclude unwanted results.

4 0
2 years ago
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