Ask question

Ask question

All categories

4 years ago

7

Miller Manufacturing has a target debt–equity ratio of .30. Its cost of equity is 12 percent, and its cost of debt is 7 percent.

If the tax rate is 34 percent, what is the company’s WACC?

1 answer:

wariber [46]4 years ago

8 0

Answer:

13%

Explanation:

You might be interested in

Calculate the payout ratio, earnings per share, and return on common stockholders’ equity. (Round earning per share to 2 decimal

drek231 [11]

Answer:

Payout Ratio 69.9%

Earning Per Share $0.94

Return on the Common Stockholder Equity 12.6%

Explanations:-

Monty Corp

1. Calculation for Payout Ratio

Using this formula

Payout Ratio = Dividend Declared/Net Income

Dividend Declared = $0.70 * Shares outstanding

Shares outstanding:-

Opening ($837,500/$3) =279,167

Issued on Feb 1 5310

Treasury (4900)

Purchased Treasury on March 20 (1300)

Shares outstanding 278,277

Dividend Declared = 278277 * $0.70

= $194,793.90

Net Income = $278600

Payout Ratio = $194793.90/$278600 = 69.9%

Therefore Payout Ratio will be 69.9%

2. Calculation for Earning Per Share

Using this formula

Earning Per share =(Net Income – Preference Dividend)/Avg Common Stock shares

Net Income = $2786,00

Preference Dividend = $294,000 * 6%

= $17640

Average Common Stock shares = (Beginning Shares outstanding + Ending Shares outstanding)/2

Beginning Shares outstanding = 279,167 – 4,900 = 274,267

Ending Shares outstanding = 278,277

Average = (274,267 + 278,277)/2 = 276,272

Earning Per Share= ($278,600 - $17,640)/276,272 = $0.94

Therefore Earning per share will be $0.94

3. Calculation for Return on Common Stockholders Equity

Using this formula

Return on Common Stockholder Equity =

(Net Income – Preference Dividend)/Avg Common Stockholder Equity

Average Common Stockholder Equity = (Beginning Stockholder Equity + Ending Stockholder Equity)/2

Beginning Stockholder Equity will be:

Beginning common stock $837,500

Beginning Paid-in Capital in Excess of Stated Value on Common Stock $536,000

Beginning Retained Earnings $695,000

Treasury Stock($39,200)

Beginning Stockholder Equity $2,029,300

Ending Stockholder Equity will be:

Ending common stock ($837,500 + [5,310*$3])

=$853,430

Ending Paid-in Capital in Excess of Stated Value on Common Stock ($536,000 + [5,310 * $4]) =$557,240

Ending Retained Earnings $761,166.10

Treasury Stock ($39,200 + [1300 * $9])

=($50900)

Beginning Stockholder Equity$2,120,936.10

Calculation for Ending Retained Earnings

Using this formula

Ending Retained Earnings = Beginning Retained Earnings + Net Income – Dividend on common & Preferred stock

= $695, 000 + $278,600 – ($194,793.90 + $17,640)

= $761,166.10

Average Common Stockholder Equity = ($2,029,300 + $2,120,936.10)/2 = $2,075,118.05

Return on Common Stockholder Equity = ($278,600 - $176,40)/$2,075,118.05

Return on Common Stockholder Equity = 12.6%

Therefore the Payout Ratio is 69.9%

Earning Per Share is $0.94

Return on Common Stockholder Equity is 12.6%

3 0

3 years ago

The centralized computer technology department of Hardy Company has expenses of $320,000. The department has provided a total of

eduard

Answer:

$480,000 and $125,000

Explanation:

The computation of the divisional income from Retail division and Commercial division is shown below:

Hardy Corporation

Divisional Income from operations

Particulars Retail Division Commercial Division

Sales $2,150,000 $1,200,000

Less: Cost of goods sold $1,300,000 $800,000

Gross profit $850,000 $400,000

Less:-Selling expenses $150,000 $175,000

Other expenses $220,000 $100,000

($320,000 × 2750 hours ÷ 4,000 hours) (320000 × 1,250 hours ÷ 4000 hours)

Income from operations $480,000 $125,000

We simply deduct the all expenses from the sales so that the divisional income from operations could come

3 0

3 years ago

Robin wants to find the perfect gift for her grandparents' 50th wedding anniversary. She started looking for the gift last month

Alika [10]

Answer: Extended problem solving

Explanation:

From the question it can be deduced that Robin is making use of extensive problem solving to get the best gift for her grandparents. Extended problem solving occurs when a buyer takes time to gather information about a product he/she intends purchasing for the first time. After getting the required information the best product would then be purchased.

7 0

3 years ago

I'm 17 yrs old, I'm tryna get a debit card but I heard I need to be 18, can a prepaid or savings account card do the same job? (

Gennadij [26K]

If your parents are okay with you getting a debit card of some sort, try the Greenlight card! It’s a debit card where the parent(s) can load money onto the card on a scheduled basis, such as allowance, or they could load money whenever they want. Also, if you are making your own cash, here is what I do. I just pay my father the money that I have and he puts that onto my Greenlight card :)

8 0

4 years ago

The main goal of any business communication is to determine what message needs to be delivered, and how to deliver it clearly an

NARA [144]

Explanation:

Commercial communication is a process that must be aligned with the strategic objectives that the company wants to achieve through sales.

For it to occur in a direct, clear and consistent way to its target audience, it is necessary for organizations to develop some essential strategies to reach the correct message to pass on to the public and which are the most effective methods to establish the ideal communication.

Some of them are:

Development of a commercial management system with a focus on the target audience
Definition of communication materials that will support content and approaches (e-mails, folders, websites, etc.)
Systematization of communication with the client identifying essential steps for building the relationship between the company and the target audience.
Support for the implementation of commercial communication programs.

It is also necessary to follow certain steps in a commercial communication project, such as making the diagnosis, collecting sales and customer information, mapping needs, etc. After the diagnosis, it is necessary to define a strategic plan, its development and the implementation and monitoring, so that the commercial communication actions reach the expected objective.

3 0

3 years ago