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nignag [31]
2 years ago
12

Suppose that TipsNToes, Inc.'s capital structure features 40 percent equity, 60 percent debt, and that its before-tax cost of de

bt is 9 percent, while its cost of equity is 15 percent. If the appropriate weighted average tax rate is 34 percent, what will be TipsNToes' WACC?
Business
1 answer:
Anit [1.1K]2 years ago
5 0

Answer:

9.564%

Explanation:

Given that,

Cost of Debt = 9%

Tax Rate = 34%

Weight of Debt = 60%

Cost of Equity = 15%

Weight of Equity = 40%

TipsNToes' WACC:

= [Cost of Debt × (1 - Tax Rate) × Weight of Debt] + [Cost of Equity × Weight of Equity ]

= [9 × (1 - 0.34) × 0.60] + (15 × 0.40)

= 9.564%

Therefore, the TipsNToes' WACC will be 9.564%

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Bradley currently has a Visa card from his bank with the following terms: 21 percent on purchases, 25 percent on cash advances w
kakasveta [241]

Complete question:

Bradley currently has a Visa card from his bank with the following terms: 21 percent on purchases, 25 percent on cash advances with a 3 percent cash advance fee on the amount, and a default or penalty rate of 33 percent. His current statement shows a balance of $9,000. Lately, he has been having a hard time paying more than the minimum payment of 3 percent of his balance.

What is Bradley's minimum payment?

A) $158

B) $189

C) $270

D) $1,890

Answer:

Bradley's minimum payment is (C) $270.

<h3>What is the percentage?</h3>
  • A percentage is a fraction of a whole expressed as a number between 0 and 100.
  • Nothing is zero percent, everything is 100 percent, half of everything is fifty percent, and nothing is zero percent.
  • To calculate a percentage, divide the share of the total by the total and multiply by 100.
<h3>Solution -</h3>

Given - 21 percent on purchases, 25 percent on cash advances with a 3 percent cash advance fee on the amount, and a default or penalty rate of 33 percent. His current statement shows a balance of $9,000. Her minimum payment is 3 percent of the balance.

So, to find the minimum payment find 3% of $9000.

3% of $9,000 = $270.

Therefore, Bradley's minimum payment is (C) $270.

Know more about percentages here:

brainly.com/question/24304697

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8 0
2 years ago
Reports how much the company is worth to the owners at the
SashulF [63]
I really want to say income statement
6 0
3 years ago
A set of speakers may be purchased now for $1000 or by making a down payment of $150 and additional payments of $100 at the end
victus00 [196]

Answer:

the nominal annual interest rate on the payment plan is 15%

Explanation:

According to the question, a one-time payment for the speakers will cost $1,000

An installmental payment will have a $150 down payment and then another $100 fro ten subsequent months.

Calculating the total payment at tthe end of the payment plan will give

$150 + ($100 x 10months)

we have, $150 + $1,000 = $1,150.

This shows that at the end of the payment plan, the set of speakers would have cost $1,150 instead of $1,00 one-time payment.

Step 2:

To calculate the interest rate, we subtract the one-time price from the payment plan price and express it as a percentage of the one time price to get tthe interest rate.

$1,150-$1,000 = $150

then we have,

($150 ÷ $1,000) × 100%

= 0.15 × 100%

- 15%

The nominal annual interest rate is 15%.

Cheers.

4 0
3 years ago
Zack received a gift of stock from his uncle on June 20 of the current year. Zack's uncle had a basis in the stock of $4,000, bu
DiKsa [7]

Answer:

$4,000

Explanation:

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3 years ago
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Is 5 a composite or prime number
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5 is a prime number
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