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
antoniya [11.8K]
3 years ago
10

Hairston Industries has $5 million of debt and $20 million of equity. If Hairston's beta is currently 1.75 and its tax rate is 4

0%, what is its unlevered beta, bU?
Business
1 answer:
nasty-shy [4]3 years ago
7 0

Answer:

The un levered beta ( bu) of the company is 1.52

Explanation:

Given information -

Equity  (E) - $20 million

Debt (D) - $5 million

Beta ( levered ) - 1.75

Tax rate ( T ) = 40%

D / E ( Debt to Equity ratio ) = $ 5 million / $20 million = .25

Formula for taking out un levered beta ( bu) is -

Beta levered ( bl ) = Beta un levered ( bu ) [1 + (1 - T ) D / E ]

1.75 = bu [1 + (1 - 40% ) .25

1.75 = bu [1 + .6 x .25 ]

1.75 = bu [ 1 + .15 ]

1.75 = bu [ 1.15 ]

bu = 1.75 / 1.15

bu = 1.52

You might be interested in
It will cost $4,000 to acquire a small ice cream cart. Cart sales are expected to be $3,200 a year for five years. After the fiv
Anna [14]
Cost = $4,000
Revenues = $3,200 per year
Life = 5 years

Payback period calculation:
Year -----   Cash flow -------- Investment
Yr 0 -----               ------------ -4,000
Yr 1 ------   3,200  -----------  -800
Yr 2 ------   3,200 -------------- 0

Payback period lies between year 1 and 2.

Therefore,
Payback period = 1+ 800/3200 = 1+0.25 = 1.25 years
5 0
3 years ago
What are the phases of Design Thinking and discuss its importance
OLga [1]

Answer:

Design thinking is a non-linear, iterative process that teams use to understand users, challenge assumptions, redefine problems and create innovative solutions to prototype and test. Involving five phases—Empathize, Define, Ideate, Prototype and Test—it is most useful to tackle problems that are ill-defined or unknown.

Explanation:

4 0
3 years ago
Read 2 more answers
Dividends to common stockholders are
posledela
Interest paid to the share holder of a specific company that offers a dividend. (note: not all companies pay dividends).
3 0
3 years ago
Match the following statements to the appropriate terms.
Korolek [52]

Answer:

a. The cost of products that are partially complete = 6. Work in progress inventory

b. The function of keeping activities in accordance with plans = 5. Controlling

c. Primarily concerned with internal users and reports pertain to subunits of the entity. = 1. Manangerial Accounting

d. Materials that can be physically and directly associated with manufacturing a product. = 7. Direct materials

e. The function of setting goals and objectives. Indirect costs of manufacturing a product. = 3. Planning

f. Primarily concerned with external users and reports pertain to the entity as a whole. = 2. Financial accounting

g. Costs that are noninventoriable. = 9. Period costs

h. All business processes associated with providing a product or service. = 10. Value chain

i. The function of coordinating diverse activities to produce a smooth-running operation. = 4. Directing

Explanation:

8 0
3 years ago
Read 2 more answers
Vera has a key supplier for her business who was facing cash flow problems which would impair Vera's ability to get shipments of
never [62]

Answer:

A) $10,000

Explanation:

Since in the question it is mentioned that for $10,000 the loan made to supplier and the supplier filed for bankruptcy and go out from the business without paying off any money

So in this case the loss would be $10,000 i.e equal to the loan amount amde to the supplier  as the non payment is also represents the bad debt and the same is allowed for the deduction

Hence, the first option is correct

 

5 0
3 years ago
Other questions:
  • A company will begin stocking remote control devices. expected monthly demand is 800 units. the controllers can be purchased fro
    5·1 answer
  • Which of the following measures how the level of well-being in a country has changed over time? a. level of nominal GDP per pers
    7·1 answer
  • Assume Time Warner shares have a market capitalization of $60 billion. The company is expected to pay a dividend of $0.30 per sh
    13·1 answer
  • Octavia has received an email from a customer asking her a question about a product unfortunately Octavia doesn't know the answe
    15·2 answers
  • "Gamboa, Inc. sold 100 selfie sticks for $25 each. If the selfie sticks had an average cost of $1 to produce, how much profit di
    9·1 answer
  • The primary role of money in the economy is to
    6·2 answers
  • Due to increased corporate responsibilities, the manager of a sporting goods store has asked the assistant manager to take respo
    14·1 answer
  • Why do people establish their own business?​
    5·1 answer
  • After the first two entries in the closing process have been recorded and posted, the debits and credits to Income Summary are $
    15·1 answer
  • a may be dfined as decriptio nof a proposed copmany that explains how it epxects to achieve its marketing
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!