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
alexandr402 [8]
3 years ago
7

A company has determined that its optimal capital structure consists of 43 percent debt and the rest is equity. Given the follow

ing information, calculate the firm's weighted average cost of capital.kd = 7.0 %Tax rate = 35 %P0 = $ 28.86 Growth = 4.9 %D1 = $ 0.94 Show your answer to the nearest .1%
Business
1 answer:
ale4655 [162]3 years ago
6 0

Answer:

31.5%

Explanation:

Given from the question kd = 7.0 %

Tax rate = 35 %

P0 = $ 28.86

Growth g = 4.9 %

D1 = $ 0.94

First find the cost of common stock by

rS = D1/P0 + g

=0.94/$28.86 + 0.49

=0.523

= 52.3%

Finally, calculate the weighted average cost of capital WACC,

using rs= 0.523,

Tax rate =43% =0.43

Equity E 100% - 43% = 57% =0.57 and

kd=7.0 % = 0.07

so WACC = (D/A)(1 -­ Tax rate)kd+(E/A)rs

= 0.43(1 ­- 0.43)(0.07) + 0.57(0.523)

0.0172 + 0.298

= 0.315

= 31.5%

You might be interested in
Which statement accurately describes a developing country?The country's population has a high growth rate.The country has a high
lukranit [14]

Answer:

A

Explanation:

developing countries have high population growth rate

3 0
4 years ago
Read 2 more answers
In December 2019, Todd, a cash basis taxpayer, paid $1,200 fire insurance for the calendar year 2020 on a building he held for r
77julia77 [94]

Answer:

D) Todd should include the $500 in 2020 gross income in accordance with the tax benefit rule.

Explanation:

Since Todd is a cash basis taxpayer, he included the $1,500 insurance premium in his 2019 tax return. Cash basis taxpayer report revenues or expenses when the cash is received or paid, not when the service is provided.

Since he received a $500 refund in 2020, he should include it in his 2020 tax return. As a cash basis taxpayer, any money received is considered income.

5 0
3 years ago
Dylan, a vice president of human resources, recommends adding self-appraisals to the company's performance management system. Th
masha68 [24]
<h2>Evaluating one's contribution gets employee thinking about their performance.</h2>

Explanation:

Self-appraisal is one of the best method to assess themselves of what kind of contribution that he has made to the company to grow.

He can also look back about the opportunities that the company has given to him to perform.

This actually,

  • speaks for results
  • gets the chance to do peer review
  • an exercise to grow in terms of career
  • list out the achievements of self
  • contribution done by the self

So the chosen statement supports Dylan's idea.

3 0
3 years ago
When a government transfers the rights and obligations of an asset to another legally separate governmental or private sector en
Mamont248 [21]

Answer: A service concession arrangement (D)

Explanation:

A service concession arrangement is an agreement whereby the government contracts with a private enterprise in order to operate, develop and maintain an infrastructural facility such as a tunnel, bridge, road, hospital, airport or prison. The government regulates and controls the kind of services the operator must provide, to whom the services are provided and at the price the services will be provided.

Concession agreements can also be between a non-governmental owner and a concessionaire, whereby the non-governmental owner gives the operator the exclusive rights to use and maintain the business for a stipulated period of time under specified conditions.

4 0
3 years ago
If a company using accrual-basis accounting wanted to overstate their income at the end of the fiscal year with increased shipme
VashaNatasha [74]

The two accounts that would be most at risk are: Sales and Accounts Receivable

Accrual method of accounting is an accounting method that reports on the company book  <em>revenue</em> and expenses as they occur in which assets are then adjusted when revenue and expenses are paid.

Assuming  a company or organization are to increased shipments which they are  having doubt about as to whether those shipment would either be returned or not paid for.

The company book would show increase in income and increase in account receivable as the company is yet to receive payment for the goods that were shipped.

In a situation were the goods that was returned are high which means that at the end of the fiscal year both sales and  account receivable account will be affected.

Inconclusion The two accounts that would be most at risk are: Sales and Accounts Receivable.

Learn more here:

brainly.com/question/17233434

4 0
2 years ago
Other questions:
  • Locus Company has total fixed costs of $117,000. Its product sells for $51 per unit and variable costs amount to $26 per unit. N
    15·1 answer
  • Which act outlaws injunctions for nonviolent labor union activities and makes yellow-dog contracts unenforceable?
    5·1 answer
  • Harlan Corporation deposits $225,000 every June 30th and December 31st in a savings account (beginning in the current year) for
    13·1 answer
  • On January 1, 2017, Grand Haven, Inc., reports net assets of $945,300 although equipment (with a four-year remaining life) havin
    5·1 answer
  • What is buisness studies​
    14·2 answers
  • Tunebeak, a fast food service chain, wants to introduce a new product. However, it lacks the financial support required to promo
    6·2 answers
  • How can we make sure animal shelters have food and space
    5·1 answer
  • Which of the following is a disadvantage of incentive compensation plans? Group of answer choices Employees are taxed heavily on
    12·1 answer
  • Performance apraisals of employees
    13·1 answer
  • Political forces that affect transportation businesses
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!