Some countries' governments do not put any limits on the purchase of foreign currency for residents and nonresidents. these countries have a freely convertible currency.
Currency is the unit of price of money that is agreed upon by the government and its people in a country. A country has its own currency, although there are several countries that have the same type of currency. For example, in Indonesia, the currency is Rupiah, while in Japan the currency is Yen. Meanwhile, countries that use the same currency include America, Ecuador, Cambodia, Panama, and the British Indian Ocean Region.
In addition, currency can also be defined as a medium of exchange for goods and services. The party or institution that has the absolute right to issue currency is the government and its central bank.
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Answer
The answer and procedures of the exercise are attached in the following image.
Explanation
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Answer:
6.57%
Explanation:
Given that,
D1 = $2.00
Dividend growth rate, g = 4.50%
Stock price, P0 = $47
Before-tax cost of debt = 6.50%
Tax rate = 40%
Target capital structure for Debt = 45%
Target capital structure for Common equity = 55%
Cost of equity:
= (D1 ÷ P0) + g
= ($2.00 ÷ $47) + 4.50%
= 4.25% + 4.50%
= 8.75%
After tax cost of dept:
= Before tax cost of dept × (1 - Tax rate)
= 6.50% × (1 - 0.40)
= 6.50% × 0.60
= 3.9%
Company’s WACC if all the equity used is from retained earnings:
= (Cost of equity × Percent of common equity) + (After tax cost of dept × Percent of debt)
= (8.75% × 55%) + (3.9% × 45%)
= 4.8125% + 1.755%
= 6.57%
Answer:
What is the amount of depreciation that warren should record for year 3 under the straight-line depreciation method? $15500
Explanation:
Net Value Dep. year End Net value.
Year 1 55000 12000 43000
Year 2 43000 12000 31000
Year 3 31000 15500 15500
Year 4 15500 15500 0
