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Bas_tet [7]
3 years ago
11

Define the following terms: a. Cost of debt b. Cost of equity c. After-tax WACC d. Equity beta e. Asset beta f. Pure-play compar

able g. Certainty equivalent
Business
2 answers:
I am Lyosha [343]3 years ago
7 0

Answer:

Explanation:

A. Cost of debt: This is the rate of a company pays on its debts, such as bonds and loans. Cost of debt is one part of a company's capital structure, with the other being the cost of equity.

B. Cost of equity : This is the return a company needs to decide if an Investment meets capital return requirements.

C. After tax WACC:This is the average after tax cost of a company's various capital sources, including common stocks, preferred stocks, bonds, and any other long term debt. In other words,WACC is the average rate of a company expect to pay to finance its assets.

D. Equity beta:This measures the volatility of the stock to the market that is, how sensitive is the stock price to a change in the overall market. Equity beta is also known as levered beta.

E. Assets beta: This is also known as unlevered beta, this is a beta of a company without the impact of debt. It is also known as the volatility of returns for a company.

F. Pure play comparable :This refers to companies that are in the single line of business. It is also used to find cost of capital for a project that is different from company's mainstream business.

G. Certainty equivalent :This is a guaranteed return that someone would accept now, rather than taking a chance on higher but uncertain, return in the future.

gtnhenbr [62]3 years ago
3 0

Answer: The answers are explained below.

Explanation:

• Cost of debt: The cost of debt is the interest rate that a company is charged on its debts. It is the interest paid on bonds, loans etc. The cost of debt is usually the before-tax cost of a debt.

• Cost of equity: The cost of equity is the return a firm pays to its equity investors e.g shareholders in order to reward them for the risk taken by investing their capital. Companies need capital to operate and grow hence, individuals and organizations who provide funds to such companies are rewarded.

• After tax WACC: The Weighted Average Cost of Capital (WACC) is a firm's combined cost of capital including preferred shares, common shares, and debt after the deduction of tax.

• Equity Beta: It measures the sensitivity of the stock price to changes in market. Equity Beta is also called levered beta.

• Asset beta: It is the beta of a firm without the effect of debt. It is a company's volatility of returns without its indebtedness.

• Pure play comparable: The pure play comparable is the taking of the beta estimate of another company that is comparable and in same line of business.

• Certainty equivalent: It is the guaranteed return that an individual would take now, rather than awaiting a higher but uncertain return later in the future.

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Sladkaya [172]

Answer:

Positioning strategies

Explanation:

In business , positioning strategies refers to the efforts that a company can do  to influence some sort of perception toward their brands.

In the example above, Markup artfully arranged  his products and priced to indicate product rarity in upscale neighborhood.

He did this because for customers with high economic power, presentation of a certain product will create the perception that owning that product indicates high social status. This probably held more value compared to the actual use function of the product itself.

On the other hand, he left his products in open boxes and placed haphazardly on shelves when targeting customers with lower income. He did this because among customers with lower income, presentation tend to matter less compared to the actual function of thier brand.

8 0
3 years ago
Do you think it is easier to increase or decrease government spending
Anna35 [415]
It is much easier to increase government spending, because it gives a temporary boost, whereas decreasing it would take away the benefits you had before, and might mess up other "things" that relied on that part you just removed to decrease government spending.
4 0
3 years ago
Your job includes ordering phone service for new employees. You are considering two phone plans. The first plan charges $23.35 p
BabaBlast [244]

Answer:

$34.68

Explanation:

The total cost by following the first plan will be the charge per months times  12 months

= $23.35 x 12

= $280.2

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5 0
2 years ago
If a firm is interested in improving their human capital which are they most likely to consider
Levart [38]

Answer:

To create human capital in a company, it is mainly necessary to capture it (recruit and select it) and retain it (make it stay in the organization).

Explanation:

First, to be able to recruit competitively, the organization has to work its corporate brand.

Secondly, there must be efficient and current recruitment processes. Recruitment is the process of attracting talent to the selection processes.

Once the worker is incorporated into the company, strategies must be used to improve talent retention and team performance.

5 0
3 years ago
A development process __________. ANSWER Unselected addresses the main value-added activities of an organization Unselected is a
cluponka [151]

Answer:

process that seeks to improve the performance of primary and support processes.

Explanation:

Development process is defined as a seeks improvement of primary and support activities by using strategy, organisation, marketing, conceptualisation, plan creation, evaluation, and commercialisation of a product or process.

Development process is used by firma to convert viable ideas to profitable products.

Innovative ideas are generated by the companie's team, and through critical evaluation the best and most commercially viable option is chosen for further product development.

This is a cycle that is continous and gives the innovative company a competitive edge.

5 0
3 years ago
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