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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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Lang Warehouses borrowed $146,960 from a bank and signed a note requiring 10 annual payments of $19,032 beginning one year from
Oksanka [162]

Answer:

The interest rate is 5%

Explanation:

Loan amortization is a method of loan repayment where a series of equal periodic installments is made by the borrower to offset the entire loan obligation. Each equal repayment covers the interest due on the loan so far and a portion of the principal amount.

At the beginning of the loan contract, the borrower is usually provided with information on the number of equal repayment installments that, if consistently paid, would offset the entire loan obligation (principal plus interest)

This is determined as follows:

repayment installment= Loan amount/Annuity factor

A special table called the Present Value of Annuity table is used to determined the annuity factor. All you need to use the table is the loan repayment period (years) " N " and the agreed interest rate " r "

So we apply this to question:

19,032= 146,960/ Annuity factor

Annuity factor= 146,960/19,032= 7.7217

We can look up this same figure in the table, to ascertain the the number of years and the rate rate. The number of years is already given as 10.

So we look up for the figure 10 under the the column labeled "n" , trace it through the row vertically to locate 7.7217. The rate that gives this figure is the applicable interest rate. This rate will be located by tracing upward from the point where we found 7.7217.

The interest rate is 5%

8 0
3 years ago
13. Average clients change their interiors every _______ years. A.2 C. 15
vichka [17]
Lacking details maybe, but since it's A or C, I'd go for C. 15 years
6 0
2 years ago
Read 2 more answers
If the monthly sales volume required to break even is $190,000 and monthly fixed costs are $55,900, the contribution margin rati
Vladimir79 [104]

Answer:

a. 29%

Explanation:

Given that

Contribution margin = $55,900

Sales = $190,000

The computation of contribution margin ratio is shown below:-

Contribution margin ratio = Contribution margin ÷ Sales

= $55,900 ÷ $190,000

= 29%    

Therefore for computing the contribution margin ratio we simply divide sales by contribution margin ratio.

6 0
2 years ago
Assessing the communication forms and orientations of coworkers and assessing their sources of identity is an example of which p
Lostsunrise [7]

Answer:

Attending

Explanation:

There are four steps in the risk negotiation cycle that includes attending, sensemaking, transforming and maintaining.

While assessing and analyzing the forms of communication and the workers orientations with respect to identify the sources reflects the attending phase whether the employees attend the orientations and according to that the analyzed could be done

Therefore this is an attending phase  

6 0
3 years ago
Turner Company owns 10% of the outstanding stock of ICA Company. During the current year, ICA paid a $5 million cash dividend on
lozanna [386]

Answer:

Turnover Company

The net income of Turnover will increase by $500,000.

Explanation:

a) Data and Calculations:

Turner Company's shareholding in ICA = 10%

ICA pays dividend totalling $5 million

Turner's share of dividend = $500,000 ($5 million * 10%)

b) This is not based on equity accounting.  Instead, the investment will be reported at fair value.  Equity accounting method will be applied in recording Turner's investments in ICA Company, if the ownership interest is valued at 20–50% of the stock.

c) The $500,000 dividends received from ICA Company will be reported in the Income Statement of Turner Company as other income, unless Turner ordinarily buys and sells stocks.  The 10% shareholding does not amount to significant control or influence for the accounts of Turner and ICA to be consolidated.

6 0
3 years ago
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