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Dmitrij [34]
3 years ago
5

Your consultant firm has been hired by Eco Brothers Inc. to help them estimate the cost of common equity. The yield on the firm'

s bonds is 8.75%, and your firm's economists believe that the cost of common can be estimated using a risk premium of 3.85% over a firm's own cost of debt. What is an estimate of the firm's cost of common from reinvested earnings
Business
1 answer:
Korvikt [17]3 years ago
4 0

Answer: 12.6%

Explanation:

From the question, we are told that a consultant firm has been hired by Eco Brothers Inc. to help them estimate the cost of common equity and that the yield on the firm's bonds is 8.75%, while the firm's economists believe that the cost of common can be estimated using a risk premium of 3.85% over a firm's own cost of debt.

The estimate of the firm's cost of common from reinvested earnings will be the addition of the risk free rate and the risk premium. This will be:

= 8.75% + 3.85%

= 12.6%

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Should all companies use blind recruiting in place of traditional recruiting, or are there exceptions that must be considered? ​
Leto [7]

Answer:

There are advantages and disadvantages to both recruitment methods. Traditional recruitment is still the most common method of recruitment used in the world, due to its simplicity and greater speed in attracting candidates through advertisements, references and internal hiring, for example, which consequently speeds up the selection process, but this type of recruitment can lead to biased evaluations of candidates and not hiring employees based on some kind of prejudice.

In blind recruitment, however, it is not possible to identify details of curriculum and candidates, the selection is made through factors such as experience and skills of the candidate, which eliminates associated prejudices such as age, gender and ethnicity. But the disadvantage of blind recruitment is that it can reduce organizational diversity and miss details that align the candidate's values ​​to organizational culture.

Therefore, it is necessary for each company to analyze which recruitment methods will be more advantageous according to the position, with traditional recruitment being more relevant for hiring professionals for higher hierarchical positions, where there is a need for a more in-depth analysis.

3 0
2 years ago
On January 1, Ramirez Supply leased a car for a four-year period, at which time possession of the car will revert back to the le
ohaa [14]

Based on the amount that Ramirez guaranteed the lessor and the estimated residual value, the amount to be added to the right-of-use asset is $1,434.33.

<h3>What amount should be added to the right-of-use asset?</h3>

This would be the present value of the difference between the guaranteed amount and the estimated residual value.

= 42,300 - 40,200

= $2,100

Present value:

= 2,100 / (1 + 10%)⁴

= 1,434.328

= $1,434.33

In conclusion, the right-of-use asset amount to be added is $1,434.33.

Find out more on present value at brainly.com/question/20813161.

#SPJ1

5 0
2 years ago
In the papyrus corporation, cash receipts from customers were $136,000, cash payments for operating expenses were $102,000, and
sleet_krkn [62]
Cash receipts from customers = $136,000
cash payment for operating expenses = $102,000
tax paid  = 1 / 3
Amount on which tax paid = $9,300
amount of tax paid = $9,300 / 3 = $3,100
net cash provides by operating activities = ?
Net cash = cash from customers - cash payment for operating expense -  amount of tax paid
= $136,000 - $102,000 - $3,100
= $30,900
so the net cash provided by operating activities is $30,900
4 0
3 years ago
The Investments Fund sells Class A shares with a front-end load of 5% and Class B shares with 12b-1 fees of 0.75% annually as we
elena-14-01-66 [18.8K]

Answer:

The responses to the given choices can be defined as follows:

Explanation:

Assume is the investment. Each original Class A investment is of the net-front unburden. The portfolio will be worth four years from now:  

\$1,000 \times 5\% = \$50 =\$1,000 - \$50 = \$950\\\\         \$950 (1 + 0.13)^4 = \$950 (1.13)^4 = \$950 (1.630474) = \$1,548.95\\\\  

You will place the total of \$1,000 on class B shares, but only 12b-1will be paid (13-0.75 = 12.25) at a rate of 12.25\% and you'll pay a 1\%back-end load charge if you sell for a four-year period.

After 4 years, your portfolio worth would be:      

\$1,000 (1 + 0.1225)^4 = \$1,437.66   \\\\      \$1,000 (1.1225)^4 = \$1000 (1.587616) = \$ 1,587.62  

Their portfolio worth would be: after charging the backend load fee:      

\$1,587.616 \times 0.99 = \$1,571.74   \\\\                     Amounts     \\\\     Class A \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \     1,548.95\\\\          Class B \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \     1,571.74 \\\\

When the horizon is four years, class B shares are also the best option.

Class A shares would value from a 12-year time frame:

\$950 (1.13)^{12} = \$950 (4.334523) = \$4,117.80  \\\\

In this case, no back-end load is required for Class B securities as the horizon is larger than 5 years.

Its value of the class B shares, therefore, is as follows:

\$1,000 (1.1225) 12 = \$1,000 (4.001623) = \$4,001.62 \\\\Amounts    \\\\\      Class A \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ 4,117.80\\\\          Class B \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \   4,001.62\\\\

Class B shares aren't any longer a valid option in this, prolonged duration. Its impact on class B fees of 0.75\%\ \ 12b-1cumulates over a period and eventually outweighs the 5\% the burden of class A shareholders.

4 0
3 years ago
Countries with more economic freedom during the past quarter of a century had a lower average per capita GDP.a. Trueb. False Cou
Sphinxa [80]

Answer:

a<u>.False.</u>

a<u>.True.</u>

Explanation:

It is correct to say that a country with more economic freedom during the last quarter of a century had a higher average GDP per capita than other countries with less freedom, this is due to the fact that the greater the economic freedom, the greater the economic growth of the country, which generates an increase in the country's productive capacity, increases demand, supply, the level of employability, the purchasing power of the population, which, integrated, these factors correspond to the increase in the country's quality of life, which increases the GDP per capita.

7 0
3 years ago
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