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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

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Answer:

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Trout farming is a perfectly competitive industry and all trout farms have the same cost curves.
Diano4ka-milaya [45]

Answer:

(i) The farm can cover its revenue using its total variable cost, therefore the farm will continue producing 200 units

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Explanation:

(i)According to given data,  When output is 200 but price is $20, this price is equal to ATC, so the farm breaks even. But since this price is higher than AVC of $15, the farm can cover its revenue using its total variable cost, therefore the farm will continue producing 200 units.

(ii) When output is 200 but price is $12, this price is equal to ATC, so the farm makes economic loss. Also, this price is lower than AVC of $15, so the farm cannot cover its revenue using its total variable cost, therefore the farm will shut down.

(iii) The farm's supply curve is the portion of its Marginal cost (MC) curve above the minimum point of AVC. Since price equals MC, the two relevant points on supply curve will be: (Price = $12 & Quantity = 0) and (Price = $25 & Quantity = 200).

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3 years ago
Power deriving from one's personal attraction is called ______ power.
Oksanka [162]

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3 years ago
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Answer:

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