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TEA [102]
3 years ago
9

The market value of Charcoal Corporation's common stock is $20 million, and the market value of its risk-free debt is $5 million

. The beta of the company's common stock is 1.25, and the market risk premium is 8%. If the Treasury bill rate is 5%, what is the company's cost of capital
Business
1 answer:
zlopas [31]3 years ago
4 0

Answer:

The company's cost of capital will be "13%".

Explanation:

The given values are:

Risk free rate

= 5

Beta

= 1.25

Market risk premium

= 8

Now,

⇒  cost \ of \ common \ stock=Risk \ free \ rate+Beta\times Market \ risk \ premium

On substituting the estimated values, we get

⇒                                    =5+(1.25\times 8)

⇒                                    =15 \ percent

The total value will be:

=  20 +5

=  $25 \ million

As we know,

⇒  WACC=Respective \ costs\times Respective \ weights

⇒              =(\frac{20}{25}\times15)+(\frac{5}{25}\times 5)

⇒              =12+1

⇒              =13 \ percent

Note: % = percent

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Explanation:

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Price elasticity of demand = Change in quantity demand / Change in price

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Change in quantity demanded = 0.4 * 8

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8 0
3 years ago
McConnell Corporation has bonds on the market with 15.5 years to maturity, a YTM of 6.2 percent, a par value of $1,000, and a cu
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Explanation:

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yield to maturity is 6.2%

coupon rate =$1039*6.2%

                    =$64.42

Coupon rate=coupon amount/par value of bond

coupon amount $64.42

par value of bond=$1000

coupon rate =$64.42/$1000

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3 years ago
Alex is starting a career in ux and wants to be able to specialize in a particular ux design role and focus on one project from
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A small start-up is a good fit for Alex.

Startups are frequently internet- or technology-based firms with broad market appeal. On the other hand, you don't need a sizable market to expand into in order to run a small firm. All you need is a market, and you must be able to effectively contact and service every member of that market.

Despite their tiny size, startups can have a big impact on the expansion of the economy. Startups are the epicenters of the invention; they generate jobs, which increases employment and boosts the economy; and they have a noticeable influence on the cities in which they settle.

After a few years of operation, startups are on the road to success. While small firms develop quickly, they can only do so if they start to see success over time. A startup needs time to develop and gain a large customer base that can use its product.

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Teamwork processes have a moderate positive relationship with team performance and a strong positive effect on team commitment.

<h3>What is team relationship?</h3>

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An effective team work would create an enabling work environment hence enables team member become more effective and efficient.

Hence, teamwork processes have a moderate positive relationship with team performance and a strong positive effect on team commitment.

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