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n200080 [17]
3 years ago
9

Jenkins Inc. has a target capital structure of 40% debt and 60% common equity, with no preferred stock. The YTM on the company’s

bonds is 9%, and its tax rate is 40%. The company’s CFO estimates that the company’s WACC is 11.5%. What is the company’s cost of common equity?
Business
1 answer:
Natalka [10]3 years ago
5 0

Answer:

15.57%

Explanation:

The WAAC (Weighted average cost of capital) is given by:

WAAC = M*W_d*(1-T)+E*W_E

Where M is the rate to maturity of the company's bonds, Wd is the fraction of debt, We is the fraction of equity, T is the tax rate, and E is the rate of cost of common equity. Applying the given data:

0.115=0.09*0.4*(1-0.4)+E*0.6\\E=0.1557\\E=15.57\%

The company’s cost of common equity is 15.57%.

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Mr. & Mrs. Dart own a majority of the outstanding capital stock of Wall Corp., Black Co., and West, Inc. During 2010, Wall a
weqwewe [10]

Answer:

The amount that would be reported as receivables from affiliates is $0.

Explanation:

Here Mr and Mrs Dart owns a majority of shares of Wall corp, Black co, and West inc. In 2010 , wall made advanced cash to black($50,000) and west($80,000) and also west made advance to black($70,000).

While preparing the combined balance sheet for all these company's , any amount of account receivables will not be included because preparing a combined balance sheet is same as making consolidated balance sheet , were any inter company profit or losses , account receivables and payable are not included in the balance sheet , so therefore the amount that would be reported as receivables from affiliates is $0.

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3 years ago
Do you believe the decision to start a new
Bad White [126]
I believe that it depends on the individuals skills if they match up well enough to the qualities of starting a business and they must know the risk they are taking with a new business so in most cases I think people should continue to look for employment
6 0
3 years ago
Andy just purchased a 2.5 acre vacant lot of land for $500,000. What was the price per square yard?
julsineya [31]

Andy just purchased a 2.5 acre vacant lot of land for $500,000. $41.32 per sq. yd price per square yard.

$500,000 ÷ 12,100 sq. yds. = $41.32 per sq. yd

What is square yard?

  • The length times the width, expressed in feet, must be multiplied by 9, and the result is the square yard (SQYDS). A square yard measures 9 square feet.
  • One billion is referred to as "yard" in finance. The word is derived from "milliard," which is comparable to the number one billion in American English and is used in various European languages.
  • Add the area to the conversion factor to convert a square yard measurement to a square foot measurement. The square yards multiplied by nine gives the area in square feet.
  • Add the length to the conversion factor to convert a yard measurement to a meter measurement. The yards times 0.9144 converts to the length in meters.

To learn more about square yard visit:

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7 0
1 year ago
Work environment includes physical and social aspects of work. true or false.
sleet_krkn [62]

i ant good but my teacher is cool and told my the answer

8 0
3 years ago
The manager of an orchard expects about 70% of his apples to exceed the weight requirement for ""Grade A"" designation. At least
kenny6666 [7]

Answer:

D) 356

Explanation:

ME = Z x √[(P x Q) / N]  

  • margin of error (ME) = 4%
  • 90% confidence level (Z) = 1.645 (by convention)
  • P = 70% of apples exceed Grade A
  • Q = 30% of apples do not exceed Grade A
  • N = sample size = ?  

0.04 = 1.645 x √[(0.7 x 0.3) / N]

0.04 = 1.645 x √(0.21 / N)

0.04 = 1.645 x 0.458 / √N

0.04 = 0.7538 / √N

√N = 0.7538 / 0.04 = 18.84

N = 18.84² = 355.2 ≈ 356 (there is no 0.2 apples, you must round up)

6 0
3 years ago
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