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
Daniel [21]
3 years ago
5

Avery Corporation's target capital structure is 35% debt, 10% preferred, and 55% common equity. The interest rate on new debt is

6.50%, the yield on the preferred is 6.00%, the cost of common from reinvested earnings is 11.25%, and the tax rate is 40%. The firm will not be issuing any new common stock. What is Avery's WACC? Select one: a. 8.15% b. 8.48% c. 8.82% d. 9.17% e. 9.54%
Business
1 answer:
RoseWind [281]3 years ago
5 0

Answer:

a. 8.15%

Explanation:

In order to find the WACC we will multiply the cost of each type of capital source and multiply it by it's weight

Common Equity = Weight of equity * Cost of equity

=0.55*0.1125=0.061875=6.1875%

Preferred stock= Weight of preferred stock*yield of preferred stock

0.10*0.06=0.006= 0.6%

Debt= Weight of debt*interest rate*(1-tax rate)

=0.35*0.065*(1-0.4)

=0.01365=1.365%

Add all of these to find WACC

6.1875+1.365+0.6= 8.15%

You might be interested in
Advertising, engineering, marketing, product design, and web design are all examples ____ of work.
Viktor [21]

Knowledge work includes, among other things, engineering, marketing, product design, and web design.

<h3>What distinguishes service work from manufacturing labor?</h3>

A service economy is built on knowledge-intensive industries and services in economic production, well-educated employees in the occupational market, and innovative enterprises in business. A manufacturing economy is driven by the mass production of products.

<h3>What are the names of networks of businesses that produce product designers, engineers, manufacturing firms, distribution channels, and consumer outlets?</h3>

A supply chain in business is a network of establishments that acquire raw materials, transform them into intermediate goods, and then distribute finished goods to customers.

To know more about marketing visit:-

brainly.com/question/13414268

#SPJ4

4 0
1 year ago
  One of the main disadvantages of buying a franchise is that you may end up 
dedylja [7]
Most likely D. Paying too much for operating costs because operating costs cost a whole lot. Where you want to buy stock for your business well all the money is going to your operations. Hope this helps :)
3 0
3 years ago
Read 2 more answers
Lonergan Company occasionally uses its accounts receivable to obtain immediate cash. At the end of June 2018, the company had ac
r-ruslan [8.4K]

Explanation:

The Journal Entry is shown below:-

a. Cash Account Dr,                                $660,000

            To Notes payable                                       $660,000

(Being amount borrowed is recorded)

b. Cash Dr,                                                $705,600

    Loss on transfer of receivable Dr,      $14,400

              To Accounts receivable                            $720,000

(Being transfer of accounts receivable is recorded)

8 0
4 years ago
Select the correct answer. You are reading product reviews posted online by consumers. Which external information source are you
joja [24]

consumer reports

_______________

8 0
2 years ago
What type of Businesses organization has limited liability ?
aleksandrvk [35]

Answer:

limited liability company or LLC is a hybrid business structure that provides the limited legal liability of a corporation and the operational flexibility of a partnership or sole proprietorship.

Explanation:

4 0
3 years ago
Other questions:
  • In one day, Sue can change the oil on 20 cars or change the tires on 20 cars. In one day, Fred can change the oil on 20 cars or
    7·1 answer
  • Several years ago, castles in the sand inc. issued bonds at face value of $1,000 at a yield to maturity of 6.2%. now, with 6 yea
    10·1 answer
  • A(n) _____ gets learners into the appropriate mental state for learning and allows them to understand the personal and work-rela
    8·1 answer
  • If you have been a victim of identity theft,what should you do after contacting the company that reported the suspicious charge
    11·2 answers
  • Charles Johnson has to make a deposit in his savings account. He has one $20 bill, two $5 dollar bills, seven $1 bills, six quar
    9·1 answer
  • Assume that your company is considering switching to cloud computing for some of its services. Some people on the team are worri
    11·1 answer
  • QUESTION 8 of 10: In a percentage lease, the landlord receives a
    8·2 answers
  • Write expanded notation of 752 863​
    7·1 answer
  • A Notary Signing Agent with nearly 10 years experience has reviewed and is completely familiar with all the documents in a loan
    12·1 answer
  • How would you use the concept of opportunity cost in deciding whether you should go to a movie this weekend?
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!