Answer:
16.091%
Explanation:
The computation of the WACC is shown below:
= (Weightage of debt × cost of debt) × ( 1- tax rate) + (Weightage of preferred stock) × (cost of preferred stock) + (Weightage of common stock) × (cost of common stock)
= (0.3 × 9%) × ( 1 - 21%) + (0.07 × 9.5%) + (0.63 × 11.60%)
= 2.133% + 6.65% + 7.308%
= 16.091%
Basically we multiplied the weightage with its cost
Answer:
Points are charged and the loan has a 30 year maturity but prepaid in five years
Explanation:
When you purchase points to lower your monthly mortgage payments, the bank (or lender) sell them calculating a 30 year payment schedule. If you pay the loan in a shorter period, it means that the points were sold at a very high price o you actually end up paying higher effective interest rate. That without even considering any possible prepayment penalties. But sometimes knowing that your mortgage is paid lowers your stress and it may be worth it from a personal (not financial) point of view.
Answer:
$12,015 approx.
Explanation:
To calculate present value of a future amount, the future amount is discounted at the rate of interest for the period of investment, which reveals present value as on today. The technique is referred to as discounting technique.
Suppose P denote the amount invested today, which when matured after period of two years yields $13500. Following formula is used for calculating the money invested:
wherein, A = Amount
P = Principal
R = Rate of interest
n = number of years
13,500 = 1.1236 P
⇒ P = 12,015 Approx.
Thus, $12015 is required to be deposited today so as to yield $13,500 after 2 years compounded at 6% per annum rate of interest.
Answer:
Sustained competitive advantage
Explanation:
In order to remain competitive, a firm should from time to time monitor and measure changes in the external environment such as political ,economic, socio-cultural,legal and other external environmental factors . In response to these external trends, a robust internal capabilities should be developed either to reduce their threats or take advantage of the opportunities as the case may be.
It is very important for the firm to have a system in place that can be used to track changes in external business environment and also measure their possible impact on the firm.
Answer:
Total of common stock = $5,000
Total of preferred stock = $15,000
Additional paid in capital = $92,500
Explanation:
Common stock
5,000 × $1 = $5,000
Additional paid in capital
5,000 × ($15 - $1)
=$70,000
Preferred stock
1500 × $10 = $15000
Additional paid in capital
= 1500 × ($25 - $10)
= $22,500
Total of common stock = $5,000
Total of preferred stock = $15,000
Additional paid in capital = $92,500