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
igor_vitrenko [27]
3 years ago
15

Assume that you are on the financial staff of Vanderheiden Inc., and you have collected the following data: The yield on the com

pany's outstanding bonds is 7.75%; its tax rate is 40%; the next expected dividend is $0.65 a share; the dividend is expected to grow at a constant rate of 6.00% a year; the price of the stock is $15.00 per share; the flotation cost for selling new shares is F
Business
1 answer:
spin [16.1K]3 years ago
6 0

Answer: 7.48%

Explanation:

Weighted Average Cost of capital is simply the weighted average of the costs of equity and debt.

Cost of Equity

= \frac{Next dividend}{Stock Price ( 1 - flotation Costs)} + growth rate

= \frac{0.65}{19(1 -0.1)} + 0.06

= 9.80%

Cost of debt

= Interest ( 1 - Tax)

= 0.075 (1 - 0.40)

= 4.65%

WACC = 9.80% * 0.55 + 4.65% * 0.45

= 7.48%

You might be interested in
Which of the following is the main incentive for a manufacturer to sell a product?
8_murik_8 [283]
D. making profits on sales
7 0
3 years ago
Joe is currently selling 873 hamburgers per month at $5 per hamburger for total monthly sales of $4,365. The restaurant manager
sergejj [24]

Answer:

Yes

Explanation:

Yes, as long as Joe is able to recover the money that he has spent on advertising and still increase his profit, then he should advertise. In this scenario, he wants to spend a fixed $1000 monthly on ads. If these ads generate an increase monthly sales of $3,000 as expected, then this means that Joe's restaurant will increase their total profits by $2,000 after recovering what they spent on the ads. This is what ads are for.

6 0
3 years ago
These are selected account balances on December 31, 2020. Land (location of the office building) $97000 Land (held for future us
Artyom0805 [142]

Answer:

$937,000

Explanation:

Calculation to determine the total net amount of property, plant, and equipment that will appear on the balance sheet

Land (location of the office building) $97000

Add Office Building 675000

Add Equipment 457000

Add Office Furniture 135000

Less Accumulated Depreciation (427000 )

Total Net Amount $937,000

Therefore the total net amount of property, plant, and equipment that will appear on the balance sheet is $937,000

4 0
2 years ago
Why is strikebreaking generally considered to be a last-resort measure for management?
umka2103 [35]
<span>Strikebreakers are also called scabs and are hired by managements to replace the employees that are on strike. This is usually a last measure because it damages the relationship that the labor and the management have with each other.</span>
4 0
3 years ago
Specific tariffs are: Group of answer choices levied as a proportion of the value of the imported good. government payment to do
adell [148]

Answer:

Option (D) is correct.

Explanation:

We all know that a country imposes tariffs on the imports of a commodity to restrict imports from other country.

Specific tariff is a type of tariff that will be imposed on the every unit of a commodity that will be imported in a country. It is a amount of money that a person have to pay for every unit he or she imports.

It is mostly levied on the products like Fertilizers, rice, wheat, cloth, sugar, cement, etc.

5 0
3 years ago
Other questions:
  • An opportunity cost: Multiple Choice Requires a current outlay of cash. Is an unavoidable cost because it remains the same regar
    7·2 answers
  • What general conclusions can be drawn about Eli’s situation? Check all that apply.
    12·2 answers
  • 1. Assume that the money demand function is (M / P)d = 2,200 – 200r, where r is the interest rate in percent. The money supply M
    11·1 answer
  • Suppose a company currently pays an annual dividend of $6.00 on its common stock in a single annual installment and management p
    14·2 answers
  • Sophia could not afford expensive furnishings, but wanted a stylish home. after researching many options, she went to a local ta
    12·1 answer
  • Fortune, Inc., is preparing its master budget for the first quarter. The company sells a single product at a price of S25 per un
    9·1 answer
  • Inventory records for Dunbar Incorporated revealed the following: Date Transaction Number of Units Unit Cost Apr. 1 Beginning in
    12·1 answer
  • What is the stated cause of action in the 2005 complaint filed by the U.S. Justice Department against the Zeon Chemical company
    11·1 answer
  • Please write out, step-by-step, how you obtained the correct answer for this math problem.
    8·1 answer
  • Hi guys, i need urgently some help with this question
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!