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
Romashka-Z-Leto [24]
3 years ago
14

The required return on the stock of Moe's Pizza is 12.2 percent and after tax required return on the company's debt is 3.82 perc

ent. The company's market value capital structure consists of 72 percent equity. The company is considering a new project that is less risky than current operations and it feels the risk adjustment factor is minus 2.1 percent. The tax rate is 35 percent. What is the required return for the new project?
Business
1 answer:
GalinKa [24]3 years ago
4 0

Answer:

WACC 7.71894%

Explanation:

WACC = K_e(\frac{E}{E+D}) + K_d(1-t)(\frac{D}{E+D})

Ke = 0.101

ER = 0.72

Kd = 0.0382

DR = 0.18

t = 0.35

WACC 7.71894%

You might be interested in
In 2017, Randa Merchandising, Inc., sold its interest in a chain of wholesale outlets, taking the company completely out of the
Tju [1.3M]

Answer:

Randa Merchandising, Inc.

1. Indication of where each of the following income-related items for this company appears on its 2017 income statement.

Income Statement

1. Net Sales

2. Cost of goods sold

3. Depreciation expense

4. Income taxes expense

5. Gain on state's condemnation of company property, net of tax

6. Gain on sale of wholesale business segment, net of tax

7. Loss from operating wholesale business segment, net of tax

8. Loss of assets from a meteor strike, net of tax

Explanation:

Randa's income statement is prepared using a step-by-step approach.  It starts with the net sales from which the cost of goods sold is deducted to arrive at the gross profit.  Thereafter, the operating expenses are deducted to obtain the operating income.  Based on this, income taxes are computed before arriving at the operating income after taxes.  And then, the extraordinary items are disclosed (net of taxes) before arriving at the net income.

7 0
3 years ago
Consider the market for socks. The current price of a pair of plain white socks is $6.00. Two consumers, Jeff and Samir, are wil
muminat

Answer:

consumer surplus = $3.5

producer surplus = $2

Explanation:

Consumer surplus is the difference between the willingness to pay of a consumer and the price of the good.

Consumer surplus = willingness to pay – price of the good

Jeff's consumer surplus = $7 - $6 = $1

Samir's  consumer surplus = $8.50 - $6 = $2.50

total consumer surplus = $1 + $2.50 = $3.50

Producer surplus is the difference between the price of a good and the least price the seller is willing to sell the product

Producer surplus = price – least price the seller is willing to accept

Manufacturer 1's producer surplus = $6 - $4.5 = $1.50

Manufacturer 2's producer surplus = $6 - $5.50 = $0.50

total producer surplus = $1.50 + 0.50 = $2

3 0
3 years ago
Which of the following statements is true? Select one: a. In an annuity due payments occur at the end of the period. b. In an or
pashok25 [27]

Answer:

b. In an ordinary annuity payments occur at the end of the period

Explanation:

<u>Why the other options are false:</u>

A.- On annuity due, the payment occurs at the beginning of the period.

B.- The perpetuity will not mature. It will yield interest for an indefinite period of time

C.- The present present value of a perpetuity is calculate as follow:

cash inflow/ interest rate = perpetuity

On an ordinary annuity, the payment occur at the end of the period, which is correct.

5 0
3 years ago
Place each of the following transactions in one of the four components of expenditure: consumption, investment, government purch
slega [8]

Answer:

a. Boeing sells an airplane to the U.S. Air Force. - government purchases.

The U.S. Air Force is a branch of the government, and is buying the airplane from Boeing. Therefore, this is a government purchase.

b. Boeing sells an airplane to American Airlines. - investment.

America Airlines, a private company, is buying the airplane to make profit from it. Therefore, it is an investment.

c. Boeing sells an airplane to Air France. - net exports.

Boeing, an American manufacturer, is selling an airplane to a foreign company: Air France, this is an import, and imports are part of net exports.

d. Boeing sells an airplane to Amelia Earhart. - consumption.

Amelia Earhart, a person, is buying an airplane. This is private consumption.

e. Boeing builds an airplane to be sold next year. - investment.

This airplane is finished inventory ready to be sold, and this type of inventory is considered an investment in the GDP calculation.

7 0
3 years ago
What is the objective of financial reporting? Provide information that clearly portrays nonfinancial transactions. Provide infor
sladkih [1.3K]

Answer:

Provide information about the reporting entity that is useful to present and potential equity investors, lenders, and other creditors.

Explanation:

Financial reporting refers to the presentation and disclosure of financial information of an entity to the public, investors, lenders and other stakeholder.

Financial reporting is carried out by reporting financial statements (balance sheet, income statements), statement of cash flows and other relevant/necessary disclosures, notes as required by law or statute or which are essential for better comprehension of such financial information.

Such information helps lenders to know the financial health of the entity, helps investors to decide whether it would be beneficial to invest in the entity, assures government of the compliance of laws by the entity, etc.

8 0
3 years ago
Other questions:
  • What is one of the best ways to determine what kind of business you'll enjoy? A. Buy an established business. B. Create one rela
    13·2 answers
  • A customer tells you that they “must have” a particular item that you are out of in your store. You can tell that the customer i
    8·2 answers
  • Freda's Florist reported the following before-tax income statement items for the year ended December 31, 2016:
    13·1 answer
  • The marginal propensity to consume is the: ratio of consumption to income. amount consumed out of an additional dollar of income
    12·1 answer
  • Plan production for a four-month period: February through May. For February and March, you should produce to exact demand foreca
    9·1 answer
  • Jan. 5 Declared a $0.50 per share cash dividend, date of record January 10. Mar. 20 Purchased treasury stock for cash. Apr. 5 De
    7·1 answer
  • The following lots of a particular commodity were available for sale during the year: Beginning inventory 5 units at $61 First p
    8·1 answer
  • CODE: oqt-hkzd-hfa<br> Join the meet and my friends are in it so don't mind
    13·2 answers
  • A small publishing company is planning to publish a new book. The production costs will include one-time fixed costs (such as ed
    10·2 answers
  • Can someone help me with this question?
    12·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!