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Salsk061 [2.6K]
3 years ago
12

All else constant, an increase in a firm's cost of debt: a. will lower the firm's weighted average cost of capital. b. will resu

lt in an increase in the firm's cost of capital. c. will increase the firm's capital structure weight of debt. d. will lower the firm's cost of equity. e. could be caused by an increase in the firm's tax rate.
Business
1 answer:
Elanso [62]3 years ago
8 0

Answer:

C

Explanation:

will increasethr firm's capital structure weight of dept.

You might be interested in
What can a food surplus lead to?
gayaneshka [121]
A food surplus in a society can lead to many different things. But based on the principles of supply and demand a surplus of food should lead to a reduction in the price of food, because the quantity supplied is most likely higher than the quantity demanded. In addition a food surplus could lead a country or companies to sell their food surplus internationally or to "dump" the goods on another country or market by selling the goods for a very cheap price most likely lower than the price of the good in that market prior to the entry of this new producer or country with the food surplus. 
4 0
3 years ago
g which is debt-free and finances only with equity from retained earnings. You were given the following information: rRF = 3.50%
Pachacha [2.7K]

Answer: 7.46%

Explanation:

The CAPITAL ASSET PRICING MODEL is a very useful tool for calculating a firm's Cost of Equity.

The Formula is,

Rc = Rrf + b(Rpm)

Where,

Rc is the Cost of Equity

Rpf is the Risk risk free rate

b is beta

Rpm is the risk premium

Plugging in the digits we have,

Rc = 0.0350 + 0.88(0.045)

= 0.0746

The firm's cost of equity from retained earnings based on the CAPM is therefore 7.46%

3 0
3 years ago
Coast to Coast Surfboards Inc. manufactures and sells two styles of surfboards, Atlantic Wave and Pacific Pounder. These surfboa
podryga [215]

Answer:

Contribution margin ratio:

For East Coast = 10%

For West Coast = 8.05%

Explanation:

As per the data given in the question,

Contribution margin by sales territory report :

C C S Inc.

Contribution margin by Territory

Particulars                             East Coast                     West Coast

Sales (a)                                $8,400,000                     $8,610,000

(30,000×$280)+(0×$130)

(21,000×$280)+(21,000×$130)

Less: variable cost of goods sold(b) $6,600,000      $6,657,000

(30,000×$220)+(0×$97)

(21,000×$220)+(21,000×$97)

Manufacturing margin (c=a-b) $1,800,000                  $1,953,000

Less: Variable selling expense (d) $960,000             $1,260,000

(30,000×$32)+(0×$28)

(21,000×$32)+(21,000×$28)

Contribution margin (e=c-d)        $840,000                 $693,000

For East Coast:

Contribution margin ratio = (Contribution margin ÷ Sales revenue)×100

=($840,000÷ $8,400,000)×100

= 10%

For west coast:

Contribution margin ratio = (Contribution margin ÷ Sales revenue)×100

=($693,000 ÷ $8,610,000)×100

= 8.05%

4 0
3 years ago
The problem with fiscal policy that is created because of the recognition, legislative, implementation, effectiveness, and the e
STatiana [176]

Answer:

A matter of timing

Explanation:

The problem with fiscal policy that is created because of the recognition, legislative, implementation, effectiveness, and the evaluation and adjustment lags is called <u>a matter of timing.</u> The reason being that it can be difficult to time fiscal policy to shift the AD curve at the right moments.

4 0
2 years ago
At the end of the current year, Accounts Receivable has a balance of $2,150,000; Allowance for Doubtful Accounts has a debit bal
disa [49]

Answer:

a. Allowance for doubtful accounts = Unadjusted balance + Adjusted balance

= $10,500 + $110,000

= $120,500

b. i)The adjusted balance of accounts receivable shall be $2,150,000(adjusted debit balance)

ii) Adjusted balance = Bad debt expense - Unadjusted balance

= $120,500 - $10,500

= $110,000 (Adjusted credit balance)

iii) Adjusted bad debt expense = Unadjusted balance of allowance for doubtful accounts + Adjusted balance allowance for doubtful accounts

= $10,500 + $110,000

= $120,500 (Adjusted debit balance)

c. Net realizable value = Gross accounts receivable - Allowance for doubtful accounts

= $2,150,000 - $110,000

= $2,040,000

3 0
3 years ago
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