1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Alexandra [31]
3 years ago
12

Johansen Corporation has a target capital structure of 60 percent common stock and 40 percent debt. Its cost of equity is 14 per

cent, and the cost of debt is 8 percent. The relevant tax rate is 30 percent.What is the company's WACC?
Business
1 answer:
Dmitry_Shevchenko [17]3 years ago
8 0

Answer:

10.64%

Explanation:

The computation of the WACC is shown below:

= Weightage of debt × cost of debt × ( 1- tax rate) + (Weightage of  common stock) × (cost of common stock)

= (0.40 × 8%) × ( 1 - 30%) +  (0.60 × 14%)

= 2.24% + 8.4%

= 10.64%

Simply we multiply the weightage with its capital structure so that the Accurate weighted cost of capital can be calculated

You might be interested in
How can inappropriate use of power by managers have a negative effect on employees? How might it negatively affect the business?
Kruka [31]
The inappropriate use by managers may get out and stop customers from shopping there 
5 0
3 years ago
g Kaye's Kitchenware has a market/book ratio equal to 1. Its stock price is $12 per share and it has 5.2 million shares outstand
Ede4ka [16]

Answer:

48.00%

Explanation:

For computing the debt to capital ratio, first we have to determine the equity value and debt value which is shown below:

Equity value = Number of outstanding shares × stock price per share

                    = 5.2 million shares × $12

                    = $62.4 million

We know,

Total capital = Debt + equity

$120 million = Debt + $62.4 million

So, the debt would be

= $120 million - $62.4 million

= $57.6 million

Now the debt to capital ratio would be

= $57.6 million ÷ $120 million

= 48.00%

7 0
3 years ago
Michael Peters is a middle-aged professional who lost his job five months ago when his former employer downsized. He’s been ac
Lerok [7]

Answer: necessity entrepreneur

Explanation: While an entrepreneur is described as someone who organizes and operates a business venture and assumes much of the associated risks, necessity entrepreneurs only do so out of necessity (the quality or state of being necessary, unavoidable, or absolute requisite). As such, they are individuals ranging from educated persons to street sellers especially in developing countries who create small businesses or enterprises out of the need to survive. In Michael Peters' case, he lost his job due to downsizing which caused him to apply his skills and talents to starting up a business.

6 0
3 years ago
How does communication aids to trade​
Alexus [3.1K]

Answer:

Aids to trade communication

<u><em>Aids to trade includes Transport, Communication, Warehousing, Banking, Insurance, Advertising, Salesmanship, Mercantile agents.</em></u>

Trade promotion organizations in a country and Global organizations for international trade. These important auxiliaries ensure a smooth flow of goods from producers to the consumers.

Hope this helpssss :)

7 0
3 years ago
Kaylie assumed the cost of the sales tax on her new (used) vehicle would be around $850. In reality, it was $725. What type of v
strojnjashka [21]

Answer:

option c

Explanation:

beacuse i know hh

8 0
2 years ago
Other questions:
  • You are a consultant to a large manufacturing corporation considering a project with the following net after-tax cash flows (in
    13·1 answer
  • Factory Overhead Rate, Entry for Applying Factory Overhead, and Factory Overhead Account Balance The cost accountant for River R
    6·1 answer
  • A sales associate is preparing a seller's net statement. She estimates a closing date of June 26. Taxes are estimated at $4,360
    9·1 answer
  • Increased demand for product A increases the demand for resources used to produce product A. What is the best explanation for th
    15·1 answer
  • ???????????????????????????
    8·1 answer
  • If oligopolistic firms facing similar cost and demand conditions successfully collude, price and output results in this industry
    5·1 answer
  • Billie Bradford worked for the Kentucky Department of Community Based Services (DCBS). One of Bradford’s co-workers, Lisa Stande
    9·1 answer
  • Sprint Planning is the only occasion where the Development Team estimates the Product Backlog Items A. True, because without est
    13·1 answer
  • What is an example for empathy and being able to recover quickly from emotional experience?
    9·1 answer
  • What are some of the reasons that foreign manufacturers of products as diverse as automobiles, cell phones, and tires might arri
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!