Answer:
b. 7.28%
Explanation:
This question is asking for the yield to maturity(YTM) of the bond. You can solve this using a financial calculator with the inputs below. Additionally, adjust the coupon payment(PMT) and time to maturity(N) to semiannual basis.
Time to maturity; N = 5*2 = 10
Face value; FV = 1000
Price of bond; PV = -1071
Semiannual coupon payment; PMT = (9%/2) *1000 = 45
then compute semiannual interest rate; CPT I/Y = 3.64%
Next, convert the semiannual rate to annual rate(YTM) = 3.64% *2
YTM = 7.28%
Cost of equity capital is closest to: 16 percent
Solution:
WACC is covered on page 120 Corporate Finance, under Capital Structure.
Using the standard equation for WACC = %wt Equity x cost of equity (re) + %wt Debt x cost of debt (rd).
Since there is a 20% tax rate for the firm, the cost of borrowing is reduced by that amount. So the cost of debt is 4%, not 5%.
Plug the formula: 10% = 50% x re + 50% x 4%
The formula ( i.e. 0.1+(0.1-0.05)(1)(1-0.2)) in CFAI reading is questionable.
The calculation is 0.1+(0.1-0.05*(1-0.2))*(1)=16%
The correct answer is 5.
Managers and analysts may better understand the competitive environment a company operates in and how it is positioned within it by using Porter's Five Forces Model.
<h3>What are the five competitive forces identified by Porter?</h3>
Porter identifies five factors as the main sources of competitive pressure within an industry. They are as follows:
a) rivalry in a healthy way.
b) supplier strength.
c) consumer power
d) threat of replacement
e) a potential new entry.
<h3>What is the operation of Porter's competitive force model?</h3>
These factors affect a company's profitability by affecting the quantity and strength of its rivals in the market, possible new market entrants, suppliers, consumers, and replacement goods. Business strategy may be guided by a Five Forces analysis to boost competitive advantage.
To know more about Business strategy, visit: brainly.com/question/3325483
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Answer:
Alternative products
Explanation:
Most of the times, people look at the quality of a product which increases the demand, even though the price is high
Answer:
Explanation:
Given:
Net sales: $20.0 billion.
Accounts receivable:
- The beginning of the year: $2.7 billion
- The end of the year $2.8 billion
a. Compute 3M's account receivable turnover.
We need to find the average account receivable:
= (the beginning account receivable + the ending account receivable) / 2
= ($2.7 billion + $2.8 billion) / 2
= $5.5 billion / 2
= $2.74 billion
- Accounts Receivable turnover ratio:
= Net annual credit sale ÷ Average accounts receivable
= $20.0 billion: $2.74 billion
= 7.3 time.
- 3M's average collection period for accounts receivable in days
= 365/Accounts Receivable turnover ratio:
= 365/7.3
= 50 days.
