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
Alex777 [14]
3 years ago
11

Bermuda Cruises issues only common stock and coupon bonds. The firm has a debt–equity ratio of .75. The cost of equity is 11.6 p

ercent and the pretax cost of debt is 6.7 percent. What is the capital structure weight of the firm's equity if the firm's tax rate is 40 percent?
Business
1 answer:
raketka [301]3 years ago
7 0

Answer:

the capital structure weight of the firm's equity will be 57.14 %.

Explanation:

Weighted Average Cost of Capital is the return that is required by the providers of long term sources of finance.

A debt–equity ratio of 0.75 means:

Debt : Equity = 0.75 : 1

The Total Ratio will be = 0.75 + 1.00

                                     = 1.75

Therefore, the  capital structure weight of the firm's equity will be :

Equity Weight = Equity Ratio ÷ Total Ratio

                       = 1.00 ÷ 1.75

                       = 0.5714 or 57.14 %

You might be interested in
Who appoints the members of the given branch in the United States?
german
T<span>hree parts. They are the </span>Executive,<span> (President and about 5,000,000 workers) </span>Legislative<span> (Senate and House of Representatives) and </span>Judicial<span> (Supreme Court and lower Courts).</span>
5 0
3 years ago
Read 2 more answers
There is a 15 percent probability the economy will boom; otherwise, it will be normal. Stock G should return 15 percent in a boo
Bess [88]

Answer

The answer and procedures of the exercise are attached in the following archives.

Step-by-step explanation:

You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.  

Download xlsx
4 0
3 years ago
During the year, Kim sold the following assets: business auto for a $1,000 loss, stock investment for a $1,000 loss, and pleasur
Anton [14]

Answer:

c. $2,000

Explanation:

total loss claim = business auto loss + stock investment loss

                         = $1,000 + $1,000

                         = $2,000

Therefore, The Kim may claim $2,000 of these losses.

3 0
3 years ago
Interest rates can be measured more accurately and quickly than reserve aggregates; hence an interest rate is preferred to the r
7nadin3 [17]

Answer:

False

Explanation:

This is false.

In reporting reserves aggregate there are lags interest rate such as the federal interest rate are quite easy to measure and easily observable. Such short term interest rate are nominal values and they do not measure the real cost of borrowing well. It does not show accurately what happens to Gross domestic product. Real interest rate equals nominal interest rate as a ratio of reduced inflation gives a representation of true cost of borrowing.

We cannot say with certainty that interests rate is a better policy instrument based on the ground of measurability.

7 0
3 years ago
ohansen Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. The
Elodia [21]

Answer:

The right solution is "$ 2.50 per DLH".

Explanation:

The given values are:

Rent,

= $ 15,000

Factor equipment's depreciation,

= $ 8,000

Indirect labor,

= $ 12,000

Production supervisor's salary,

= $ 15,000

Estimated DLHs,

= 20,000

The total manufacturing overhead will be:

= Rent+Factory's \ equipment \ depreciation+Indirect \ labor+Production \ supervisor's \ salaryOn substituting the given values, we get

= 15000+8000+12000+15000

= 50,000 ($)

Now,

The predetermined overhead rate will be:

=  \frac{50000}{20000}

= 2.50 \ per \ DLH ($)

3 0
3 years ago
Other questions:
  • Since its establishment in 1945, the United Nations has...
    8·1 answer
  • When the exchange rate between the U.S. dollar and the euro changes from 1.30 euros per dollar to 1.00 euro per dollar the dolla
    14·1 answer
  • Approximately __________ of trades involving shares issued by firms listed on the New York Stock Exchange actually take place on
    6·1 answer
  • When secondary market buyers and sellers of securities meet in one central location to conduct trades the market is called:
    14·1 answer
  • A firm in a perfectly competitive industry in​ long-run equilibrium will earn normal returns and zero economic profit.
    6·1 answer
  • Brenda is the owner of a spa store that operates 50 weeks per year. Spair Shampoo is a high margin stock-keeping unit (SKU), but
    12·1 answer
  • QUESTION 4 / 10
    9·1 answer
  • How have the general ideologies of each major party change over time?
    12·1 answer
  • Help pls
    11·2 answers
  • Budgeting is the process of planning future business activities and expressing them as?
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!