I am pretty sure it would be the first 2 but I am not the best at this. I am so sorry if this isn't correct!!
Answer:
B) Ace Builders' cost of capital.
Explanation:
Boone Brothers currently operates in a business that is related to Ace Builders's business but it is not the same to be involved in part of a industry than being involved in the whole industry.
Therefore Boone Brothers should use any information they can get from Ace to try to evaluate their own expansion project. Not only can Ace's cost of capital be useful, several other information like total construction periods, resources needed for permits and authorizations, etc.
Answer:
b. 12.24%
Explanation:
The computation is shown below;
The cost of debt is 11%
As when the bonds would be sell at par value so yield to maturity = coupon rate = cost of debt i.e. 11%
Now
cost of equity= ((Do × (1+g)) ÷ P)+g
= (($2.05 × (1 + 7%)) ÷ 27) + 7
= 15.12%
Now
WACC = weight of equity × cost of equity + weight of preferred equity × cost of equity + weight of debt × cost of debt × (1 - tax rate)
= 55% × 15.12% + 5% ×12.4% + 40% × 11% × (1 - 25%)
= 12.24%
Answer: Option (d) is correct.
Explanation:
The individual's willingness to pay for a product tells us about the value or worthiness of that good to that individual and people attached these value on the product according to the utility that they are getting from the product. So, firms observed these individual behaviors to set the price of a commodity or a good. They are trying to set prices below or equal to the willingness of the individuals.