Game theory:

Targaryen Corporation has a target capital structure of 75 percent common stock, 10 percent preferred stock, and 15 percent debt

erastova [34]

Answer:

a.

WACC = 0.07961 or 7.961% rounded off to 7.96%

b.

After tax cost of debt = 0.0474 or 4.74%

Explanation:

a.

The weighted average cost of capital or WACC is the cost of a firm's capital structure. To calculate the WACC, we multiply the weight of each component of the capital structure by the cost of that component. The components of capital structure can be one or all of the following namely debt, preferred stock and common stock.

The formula for WACC is,

WACC = wD * rD * (1-tax rate) + wP * rP + wE * rE

Where,

w represents the weight of each component

r represents the cost of each component

D, P and E represents debt, preferred stock and common stock respectively

WACC = 0.15 * 0.06 * (1 - 0.21) + 0.1 * 0.05 + 0.75 * 0.09

WACC = 0.07961 or 7.961% rounded off to 7.96%

b.

The after tax cost of debt is calculated by multiplying the cost of debt by (1 - tax rate) to adjust for the tax advantage provided by debt as interest payments on debt are tax deductible.

After tax cost of debt = 0.06 * (1 - 0.21)

After tax cost of debt = 0.0474 or 4.74%

7 0

3 years ago

Van Den Borsh Corp. has annual sales of $68,735,000, an average inventory level of $15,012,000, and average accounts receivable

Romashka-Z-Leto [24]

Answer:

The answer is d. -32 days.

Explanation:

*The before change cash conversion cycle = Days of inventory outstanding + Days of receivables outstanding - Days of payable outstanding.

in which:

Days of inventory outstanding = Average inventory / Cost of good sold x 365 = ( 15,012,000 / ( 68,735,000 x 0.85) ) x 365 = 94 days

Days of receivables outstanding = Average Receivables / Revenue x 365 = ( 10,008,000 / 68,735,000 x 365 = 53 days

Days of payable = 30 days

=> Before change cash conversion cycle = 117 days.

* The after-change cash conversion cycle is calculated with the same formula, however with estimated changes be applied in the formula as followed:

Days of inventory outstanding = Average inventory / Cost of good sold x 365 = ( (15,012,000 - 1,946,000) / ( 68,735,000 x 0.85) ) x 365 = 82 days

Days of receivables outstanding = Average Receivables / Revenue x 365 = ( (10,008,000 - 1,946,000) / 68,735,000 x 365 = 43 days

Days of payable = 40 days

=> After-change cash conversion cycle = 82 + 43 - 40 = 85 days

=> Net change is 85 - 117 = -32 days

6 0

3 years ago

The Jones are a married couple and have always filed joint tax returns. On May 18, 2017, the couple was assessed with tax defici

Katena32 [7]

Answer:

c. May be able to avoid liability to the extent she had no reason to know of the deficiency (and did not have actual knowledge) when filing the return. The burden of proof will be on her.

Explanation:

The doctrine of innocent spouse relief might apply here. Mrs. Jones will have to prove that:

the income that was omitted was earned by her husband, not her.
she must prove that when she signed the tax filings, she was not aware of the omission.
after examining all the facts surrounding the omission, the IRS must decide that blaming her would not be fair.

8 0

3 years ago

A process costing system is employed in those situations where: Group of answer choices full or absorption cost approach is not

anygoal [31]

Answer:

where manufacturing involves a single, homogeneous product that flows evenly through the production process on a continuous basis.

Explanation:

Process costing can be regarded as accounting methodology which helps in tracing and accumulation of direct costs, s well s allocation of indirect costs of a manufacturing process. In this method, Costs are been assigned to products, and this is usually in a large batch, and could encompass an entire month's production.

It should be noted that process costing system is employed in those situations where where manufacturing involves a single, homogeneous product that flows evenly through the production process on a continuous basis.

7 0

3 years ago

One of the most useful ways to break the glass ceiling in organizations is to _____. Select one: a. eliminate status-blind emplo

kobusy [5.1K]

(A) Eliminate status-blind employment practice.

What is a glass ceiling?

A glass ceiling is a metaphor used to represent an invisible barrier that prevents a given demographic from rising beyond a certain level in a hierarchy.
The metaphor was first coined by feminists in reference to barriers in the careers of high-achieving women.

In the United States, the term is sometimes extended to include barriers to minority women's and minority men's advancement.
Minority women in white-majority countries frequently face the greatest challenges in "breaking the glass ceiling," because they are at the convergence of two historically marginalized groups: women and people of color.
The phrase "bamboo ceiling" was coined by East Asian and East Asian American news outlets to describe the barriers that all East Asian Americans encounter in furthering their careers.

After reading all the questions option (A) is the most useful way to break the glass ceiling.

Therefore, the correct option is (A) Eliminate status-blind employment practice.

Know more about organizations here:

brainly.com/question/19334871

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3 0

2 years ago