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Komok [63]
3 years ago
10

For purposes of computing the WACC, if the book value of equity exceeds the market value of equity, then: the market value of eq

uity should be used. the book value of equity should be used. the market value of equity less retained earnings should be used. the book value of equity less retained earnings should be used.
Business
2 answers:
vagabundo [1.1K]3 years ago
5 0

Answer:

The market value of equity should be used.

Explanation:

Their are only two methods which are book value method or market value method. The market value method is preferred because the reason is that the market value gives the more accurate numerical value that the securities of the company will give which is the required rate of return to its investors. However historic cost data is not useful because the value of stock and bonds keeps changing every second in the stock exchange and their is the risk that the WACC calculated is inaccurate which implies that the project appraised is also incorrect.

So the best way to calculate the weighted cost of capital is that we should use the fair value of the securities.

poizon [28]3 years ago
3 0

Answer:

For purposes of computing the WACC, if the book value of equity exceeds the market value of equity, then the book value of equity less retained earnings should be used.

Explanation:

Weighted Average Cost of Capital (WACC) is the average rate a company expects to pay to finance its assets.

It is a calculation of a firm's cost of capital in which each category of capital is proportionately weighted

WACC is calculated by multiplying the cost of each capital source (debt and equity) by its relevant weight, and then adding the products together to determine the value.

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Marsden Company has three departments occupying the following amount of floor space: Department 1 15,000 sq. ft. Department 2 10
PolarNik [594]

Answer:

the store rent that should be allocated in department 3 is $100000

Explanation:

if we assume that we charge the rent per square feet occupied, then we can say

department rent = charge per square feet* number of square feets

r = k*sf

also if

total rent = rent department 1 + rent department 2  + rent department 3

r total = r1 + r2 + r3 = k*sf1 + k*sf2 + k*sf3 = k*( sf1 + sf2 + sf3)

k= r total / ( sf1 + sf2 + sf3)

replacing values

k = $200000/(15000 sq.ft + 10000 sq.ft +25000 sq.ft ) = $ 4 per sq.ft

thus for department 3

r3 = k* sf3= $ 4 per sq.ft * 25000 sq.ft = $100000

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8 0
3 years ago
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Alja [10]

Answer:

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Explanation:

A command Economy  stresses the equality of all citizens.e. g Cuba and North Korea

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A traditional economy being the oldest form of economy upholds culture and history and as such relies more on bartering than money. It is mostly common in emerging markets and developing countries.

A mixed economy encourages private businesses with a degree of state monopoly.Example is the USA's economy.

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Hope this helps!

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3 years ago
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