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zhuklara [117]
3 years ago
5

CoffeeCarts has a cost of equity of ​, has an effective cost of debt of ​, and is financed with equity and with debt. What is th

is​ firm's WACC?
Business
1 answer:
-Dominant- [34]3 years ago
8 0

Complete Question:

Coffee Carts has a cost of equity of 15.5%, has an effective cost of debt of 3.9%, and is financed 75% with equity and 25% with debt. What is the firm's WACC?

Answer:

The firm's WACC is:

= (0.75 * 0.155) + (0.25 * 0.039)

= 0.11625 + 0.00975

= 0.126

= 12.6%

Explanation:

CoffeeCarts Company's WACC (Weighted Average Cost of Capital) is the average rate that the company is expected to pay to all its security holders (stockholders and debt holders) who financed its assets.  We can calculate CoffeeCarts' WACC by multiplying the cost of each capital source (equity and debt) by its relevant weight, and then adding the products together.  The weight is the proportional percentage of each class  of finance source to the whole.

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3 years ago
On November 1, Bahama National Bank lends $3.8 million and accepts a six-month, 6% note receivable. Interest is due at maturity.
babymother [125]

Answer and Explanation:

The journal entries are shown below:

a. Note receivable Dr $3,800,000

        To Cash $3,800,000

(Being the acceptance of the note is recorded)

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b. Interest receivable Dr  $38,000

                 To Interest revenue  $38,000

(Being the interest revenue is recorded)

For recording this we debited the interest receivable as it increased the assets and credited the interest revenue as it increased the revenue

The computation is shown below:

= $3,800,000 × 6% × 2 months ÷ 12 months

= $38,000

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7 0
3 years ago
A company had 6,950,000 net income for the year. Is net sales were 14,700,000 for the same period. Calculate its profit margin.
kobusy [5.1K]
0.46 or 46% hope this helps
5 0
3 years ago
Which combination of factors would result in the lowest monthly mortgage payment?
Anit [1.1K]
The choices can be found elsewhere and as follows:

<span>A.) Big down payment,a longer term loan, and a low interest rate
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C.) </span><span>Small down payment, a shorter term loan, and high interest rate
D.) </span><span>Small down payment, a shorter term loan, and small interest rate

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8 0
3 years ago
If I invest $1000 in company A, there's a 40% chance I'll double my money, and a 60% chance I'll lose half my money. Those are t
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The expected monetary value of the investment of $1,000 in Company A is $800.

Data and Calculations:

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Thus, the expected monetary value of the investment is $800.

Learn more: brainly.com/question/13905997

8 0
2 years ago
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