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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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Bradford Company had sales of $700,000 for a year. The total assets at the beginning of the year were $240,000, and the total as
11111nata11111 [884]

Answer:

Option (a) is correct.

Explanation:

Given that,

Sales = $700,000

Beginning total assets = $240,000

Ending total assets = $280,000

The asset turnover ratio refers to the ratio of sales to the average total assets.

Average total assets:

= (Beginning total assets + Ending total assets) ÷ 2

= ($240,000 + $280,000) ÷ 2

= $260,000

Therefore, the asset turnover ratio is as follows:

= Sales ÷ Average total assets

= $700,000 ÷ $260,000

= 2.69

7 0
3 years ago
What is the difference between productive and service oriented professions Explain with examples​
Ghella [55]

Answer:

Explanation:

Product vs Service Business

While it may seem to go against traditional thinking, in some ways there is very little difference between product based and service based companies. In actuality, both sell a product. The distinction between the two is that the product business sells a physical, tangible product, while the service business owner sells his skills as the primary product. In the service-based business, customers purchase the skills of a service provider or owner, such as a plumber or lawyer, This type of business has a strong emphasis on the client relationship and makes the customer's user experience very important. Product-based businesses, on the other hand, deliver physical products that are reasonably consistent in quality for each customer, making the customer experience fairly predictable.

Local or Global Consumer Markets

In general, when consumers are looking for new solutions they try to distinguish the different services/products of business and industry in the locality where they reside. As such, businesses need to target their product and service based businesses to the appropriate markets. Consumers located anywhere in the global market can purchase a product via the internet as long as they can have their purchase delivered locally and cost effectively. However, most service businesses can only provide services to customers within their local target market. For example, while a computer store can ship computers all over the world, a hairstylist will only attract clients within a reasonable driving distance from her home or business. As a result, businesses need to consider how their customer base will influence their marketing efforts.

pl. make it as brainliest if it's helpful to you...!!

5 0
2 years ago
Lance Lawn Services reports warranty expense by estimating the amount that eventually will be paid to satisfy warranties on its
timofeeve [1]

Answer:

Explanation:

The journal entry is shown below:

Income tax expense A/c Dr $30,035,000

       To Deferred tax asset A/c $35,000

       To Income tax payable A/c $30,000,000

(Being the income tax expense is recorded)

The computation is shown below:

For deferred tax asset:

= Deferred tax rate - Warrant liability × tax rate

= $435,000 - $1,000,000 × 40%

= $435,000 - $400,000

= $35,000

For income tax payable:

= Taxable income × tax rate

= $75,000,000 × 40%

= $30,000,000

3 0
2 years ago
U.S. exports of goods and services flow to households and firms in ________, and U.S. financial inflows of capital flow to house
kondaur [170]

Answer:

The correct anwer is: the rest of the world; the United States.

Explanation:

Now, the goods exported by the United States tell only part of the story. Services are the largest export of this country, with sales abroad for 778,000 million dollars last year. In fact, the United States has a trade surplus of $ 243 billion in services, which is good news since the industries in this sector account for 71% of jobs in the country

These are the service industries that generate the most money:

  1. Travel and transportation: 236,000 million dollars.  
  2. Finance and insurance: 76,000 million dollars.
  3. Intellectual property sales: 49,000 million dollars. This includes software, movies and TV shows.
5 0
3 years ago
The homeowner's property tax exemption will reduce an assessed valuation of $200,000 to:____.
inessss [21]

As per the rate of the tax, the valuation of $200,000 will become $193,000.

Given Data:

Valuation Price = $200,000

To Find:

After-Tax exemption Valuation= ?

Let us consider the general interest rate of the property. It would be about 3.5% which is 0.035.

According to the normal tax of about 3.5% will become $7000 which will be exempted from the total evaluation therefore it will become $193,000.

Solution:

<em>Tax Value in $ =$200,000 x 3.5% = $7000</em>

<em>here we have the $7000 which is the amount of tax paid by the homeowner.</em>

Putting the value of the tax;

<em>Tax after exemption of tax value = $200,000-$7000 </em>

<em>= $193,000</em>

So, the $193,000 is the price after the deduction of tax by the homeowner.

For more questions like Home tax evaluation open the link below:

brainly.com/question/17132518

#SPJ4

3 0
1 year ago
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