Answer:
The firm's optimal capital structure is 80% Debt and 20% Equity.
The WACC at this optimal capital structure is 10.28%.
Explanation:
Note: See the attached excel file the computation of the weighted average cost of capital (WACC) at the optimal capital structure. Also note that the data in the question are merged together but they are sorted in the attached excel file before answering the question.
The optimal capital structure of a firm can be described as a combination of debt and equity financing that is the beat in which market value of the firm is maximized while its cost of capital is minimized.
Using the weighted average cost of capital (WACC), the optimal capital cost capital structure occurs at a point where the WACC is the lowest.
From the attached excel file, the lowest WACC is 0.1028, or 10.28%. At this firm Market Debt- to-Value Ratio (wd) which is debt is 0.80 (i.e. 80%), and Market Equity-to-Value Ratio (ws) which is equity is 0.20 (i.e. 20%).
Therefore, the firm's optimal capital structure is 80% Debt and 20% Equity.
The WACC at this optimal capital structure is 10.28%.
Answer: Option A
Explanation: Any person can become a principal having sufficient business but in order to become an agent of the principal one needs to have the capacity to contract on behalf of the principal.
In a principal agent relationship, the principal bounds the agent to act on his behalf. So, there is no legal contracts to become a principal but the acts of agent are legally bound to a certain extent.
Hence, option A is correct.
Answer:
He should ask nieghbors to stop
Explanation:
Because asking nice is not a bad reason
Answer:
The statement is: True.
Explanation:
The Time Value of Money is a concept that states a dollar today is always worth more than a dollar tomorrow. The theory relies on the earning capacity of money. The approach is the reason why entrepreneurs prefer to capitalize on their investments the soonest so the more money available now will represent for them more money accrued in the future.
Answer:
The statement has to be classified as very effective or very ineffective.
The correct answer is:
Very ineffective
Explanation:
The word effective means "something that results in the desired effect", therefore, ineffective means the opposite "something that does not result in the disired effect".
In this case, the desired effect is to modify the employee's behaviour. If we as employers drop small hints about what is bothering us, the employee may not be able to understand what we mean, and continue behaving in the same manner.
It is more effective to have clear, straightforward communication in the workplace. If an employee behaviour is bothering us, we should simply communicate it in a direct and respectful manner.
