Answer:
return on equity 20%
Explanation:
The return on asset will be like the WACC of the company
thus, we have:
![WACC = K_e(\frac{E}{E+D}) + K_d(1-t)(\frac{D}{E+D})](https://tex.z-dn.net/?f=WACC%20%3D%20K_e%28%5Cfrac%7BE%7D%7BE%2BD%7D%29%20%2B%20K_d%281-t%29%28%5Cfrac%7BD%7D%7BE%2BD%7D%29)
with:
Ke x
Equity weight 0.6000
Kd 0.075
Debt Weight 0.4000
t 0 (ignore taxes)
with WACC = 0.15
![0.15 = K_e(0.6) + 0.075(1-0)(0.4)](https://tex.z-dn.net/?f=%200.15%20%3D%20K_e%280.6%29%20%2B%200.075%281-0%29%280.4%29)
![K_e(0.6) = 0.15 - 0.075(1-0)(0.4)](https://tex.z-dn.net/?f=%20%20K_e%280.6%29%20%3D%200.15%20-%200.075%281-0%29%280.4%29)
![K_e = ( 0.15 - 0.075(1-0)(0.4) ) / 0.6](https://tex.z-dn.net/?f=%20%20K_e%20%3D%20%28%200.15%20-%200.075%281-0%29%280.4%29%20%29%20%2F%200.6%20)
Ke = 20%
Answer:
a. human resource is the answer
Answer: 9.32%
Explanation:
The cost of levered capital is needed to calculate WACC.
Cost of levered capital = Cost of unlevered capital + (Cost of unlevered capital - cost of debt)(1 - tax) * Debt to equity ratio
Debt-equity ratio
= 22% / (100% - 22%)
= 28.205%
Cost of levered capital = 10% + (10% - 6%) * (1 - 31%) * 28.205%
= 10.78%
WACC = (Weight of debt * after tax cost of debt) + (Weight of capital * cost of capital)
= (22% * 6% *(1 - 31%)) + (78% * 10.78%)
= 9.32%
Answer and Explanation:
B) sets policy on the sale and purchase of government bonds by the Fed.