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
ira [324]
3 years ago
14

Mullineaux Corporation has a target capital structure of 70 percent common stock and 30 percent debt. Its costs of equity is 15

percent, and the cost of debt is 8 Percent. The relevant tax rate is 35 percent. What is Mullineaux's WACC?Common stock weight = 70%Debt weight = 30%Cost of Equity = 15%Cost of Debt = 8%Tax Rate = 35%WACC= ?
Business
1 answer:
likoan [24]3 years ago
5 0

Answer:

12.06%

Explanation:

The formula to compute WACC is shown below:

= Weightage of debt × cost of debt × ( 1- tax rate) + (Weightage of  common stock) × (cost of common stock)

= (0.30 × 8%) × ( 1 - 35%) +  (0.70 × 15%)

= 1.56% + 10.5%

= 12.06%

Simply we multiply the cost of each capital structure with its weightage so that the correct weighted average cost of capital can come

You might be interested in
Assume for a perfectly competitive firm, the market price of one box of tissues is $2. What is the marginal revenue when sales i
trapecia [35]

Answer:

The marginal revenue = $2

Explanation:

Firstly we calculate the value in dollars for the number of boxes sold

For 100 boxes, we have 100 * 2 = $200

For 200 boxes, we have 200 * 2 = $400

Mathematically, the marginal revenue = (cost of 200 boxes- cost of 100 boxes)/difference in quantity

= (400-200)/(200-100) = 200/100 = $2

Thus affirms the fact that for a perfectly competitive firm, marginal revenue MR = P (price)

8 0
3 years ago
You are holding a stock that has a beta of 1.39 and is currently in equilibrium. The required return on the stock is 20.47%, and
r-ruslan [8.4K]

Answer: 26.73%

Explanation:

You can calculate the expected return using the Capital Asset Pricing Model (CAPM).

Formula is:

Expected return = Risk free rate + beta * (Market return - risk free rate)

Use the previous figures to solve for the risk free rate:

20.47% = Rf + 1.39 * (16.50% - Rf)

20.47% = Rf + 22.935% - 1.39R

20.47% - 22.935% = Rf - 1.39Rf

-2.465% = -0.39Rf

Rf = -2.465% / -0.39

= 6.32%

New expected return is:

= 6.32% + 1.39 * (21% - 6.32%)

= 26.73%

7 0
3 years ago
The following events took place at a manufacturing company for the current year:
PilotLPTM [1.2K]

Answer: $25,369.50

Explanation:

GIVEN THE FOLLOWING :

Purchased direct material = $97,000

(2) Incurred labor costs as follows: (a) direct, $58,000 and (b) indirect, $15,600.

(3) Other manufacturing overhead was $109,000, excluding indirect labor.

(4) Transferred 80% of the materials to the manufacturing assembly line.

(5) Completed 65% of the Work-in-Process during the year.

(6) Sold 85% of the completed goods.

(7) There were no beginning inventories.

Ending work in process inventory is calculated by;

(Beginning inventory + 0.8(direct material purchased) + direct Labor + (indirect labor + other manufacturing overhead)) × percentage Work in process

($0 + (0.8×97000) + 58000 + (15600+109000))×0.65

=($0 + $77,600 + $58,000 + 124600)×0.65 = $169,130

Ending WIP Inventory = (100-85)% × $169,130

0.15 × $169,130 = $25,369.50

6 0
3 years ago
Snoopy, Inc. records its bad debt expense on the credit sales method. Total sales during 2020 were $1,500,000, which consisted o
quester [9]

Answer:

the amount of bad debt expense for the year 2020 is $36,000

Explanation:

The computation of the amount of bad debt expense is shown below:

= Estimation of 3% net sales that would be uncollectible

= 3% of ($1,500,000 - $300,000)

= 3% of $1,200,000

= $36,000

Hence, the amount of bad debt expense for the year 2020 is $36,000

The same is to be considered

6 0
2 years ago
Lars and Shelia work together in an office. Lars makes copies of documents for Shelia, handles phone calls, and files reports. S
Oxana [17]
D is the correct answer from the choices!!!!!!
5 0
2 years ago
Read 2 more answers
Other questions:
  • You are considering a 5/1 ARM. What does the 5 represent? . A.The number of years between adjustments in the interest rate . B.T
    7·2 answers
  • A customer paying $100 for a service with a credit card would be a debit to which account?
    13·2 answers
  • Cost leadership is most appropriate when a. industry rivalry is high and customers are very sensitive to prices. b. product inno
    10·1 answer
  • What is the expected return on this stock given the following information?
    9·1 answer
  • Why doesn't the theory of averages work for investing in the dow jones industrial average or the standard & poor's 500-stock
    5·1 answer
  • Three major areas of concern when providing financial information to the larger investing community are language, currency, and
    5·1 answer
  • Suppose that real GDP per capita in the United States is $49,000. If the long-term growth rate of real GDP per capita is 1.6% pe
    8·1 answer
  • Determine which moral standard of social responsibility the business is observing.
    6·1 answer
  • Informal groups: Group of answer choices exist primarily for the benefit of their members. perform routine organizational goals.
    11·1 answer
  • LBM, Inc. issues 25,000 shares of common stock for $20 per share. The stock has a par value of $1 per share. By what amount woul
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!