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
hichkok12 [17]
3 years ago
13

Central Systems desires a weighted average cost of capital of 12.7 percent. The firm has an aftertax cost of debt of 4.8 percent

and a cost of equity of 15.4 percent. What debt-equity ratio is needed for the firm to achieve its targeted weighted average cost of capital?
Business
1 answer:
Anon25 [30]3 years ago
7 0

Answer:

Debt-equity ratio = 0.34 or 34%

Explanation:

Weighted average cost of capital (WACC) = 12.7%

Cost of debt = 4.8%

Cost of equity = 15.4%

Let 'We' and 'Wd' be the fraction of capital corresponding to equities and costs, respectively, and that We + Wd =1.

The weighted average cost of capital is given by

WAAC = 0.154*W_e +0.048W_d\\0.127 = 0.154*W_e +0.048*(1-W_e)\\0.079 = 0.106W_e\\W_e=0.745\\W_d = 1-0.745=0.255

The debt-equity ratio is:

DER = \frac{W_d}{W_e}=\frac{0.255}{0.745}\\DER =0.34

You might be interested in
One method used by some analysts to estimate the future value of a stock is the dividend growth model. This model would probably
Ray Of Light [21]

Answer:

I am sure that it is D. a large cap stock

Explanation:

Large cap stocks already have a positive growth sentiment and

based on how much dividends are paid out they can estimate the future

value of a stock.

8 0
2 years ago
If manufacturing overhead has been underallocated during the period, then which of the following is true?(a) the jobs produced d
Alecsey [184]

Answer:

The correct answer is B: the jobs produced during the period have been under-costed

Explanation:

Giving the following information:

If manufacturing overhead has been under-allocated during the period, then which of the following is true?

(a) the jobs produced during the period have been over-costed

(b) the jobs produced during the period have been under-costed

(c) the jobs produced during the period have been costed correctly

(d) none of the above

When manufacturing overhead has been under-allocated means that the actual costs incurred where superior that the estimated cost for the period.

7 0
3 years ago
Which of the following describes the management function that includes determining which tasks will be done, who will do them, h
ololo11 [35]

Answer:

Planning management function

Explanation:

Planning is a management procedure which aims to identify objectives for the long term future of an organization and to determine the tasks and resources required in achieving these objectives. Managers should create a business plan or a marketing plan for achieving objectives.

4 0
3 years ago
According to the path-goal theory of leadership, the level of involvement a manager utilizes should (1) be the same for all empl
harkovskaia [24]

Answer:

1. None of the above

2. All of the above

Explanation:

According to the path-goal theory of leadership, the level of involvement a manager utilizes should (1) be the same for all employees in the department, (2) be either low or high management involvement regardless of the circumstances, and (3) not be influenced by subordinates' expectations. Which statements are correct?

<u>NONE OF THE ABOVE</u>

<u>The Path-Goal theory of leadership stipulates that managers should adapt a leadership style that is employee oriented for the purpose of organizational goal achievement. </u>

<u />

This is an ability issue. When a manager's performance deteriorates because manager's ability has deteriorated. The steps to be taken will be in the order below:

(1) Determine if the resources are adequate,

(2) retrain the individual, and

(3) redesign the job.

<u>All of the above steps are correct in that order</u>

3 0
3 years ago
If employees are bonded a. it means that they are not allowed to handle cash b. they have worked for the company for at least 10
Ierofanga [76]

Answer:

c. they have been insured against misappropriation of assets.

Explanation:

A company bonds its employees to protect itself against theft by its workers.  Being bonded means securing the money available to customers if a claim is made against the company. Bonding offers compensation to a business should a loss arise through employee's actions.

The law requires companies that handle cash and cash equivalents such as stocks certificates to bond their employees. A company may choose from the various types of bond insurance in the market. For example, employers may use the fidelity bond to protect against employee theft.

6 0
3 years ago
Other questions:
  • you are shown a coin that its owner says is fair in the sense that it will produce the same number of heads and tails
    10·1 answer
  • The ups store's advertising "what brown can do for you" whiteboard campaign tells business consumers that when it comes to getti
    6·1 answer
  • Wims, inc., has current assets of $5,000, net fixed assets of $23,000, current liabilities of $3,500, and long-term debt of $7,9
    10·1 answer
  • Suppose that it is friday night, that xavier and her friends have been out at a party, and that they are now heading home. suppo
    8·1 answer
  • The price quotations of Treasury bonds in the Wall Street Journal show an ask price of 104.25 and a bid price of 104.125.
    9·1 answer
  • Joan bought a business machine for $15,000. In a later year, she sold the machine for $12,800 when the total allowable depreciat
    7·1 answer
  • A company that makes modular bevel gear drives with a tight swing ratio for optimizing fork-lift vehicles was told that the inte
    10·1 answer
  • Evaluation of the amount of costs incurred should be based on the actual volume of activity rather than the planned volume of ac
    5·1 answer
  • Abc buys widgets for $5 cash and sells them on account for $8. From a cash flow perspective, the receivable is valued at?.
    9·1 answer
  • what should you do if you do not have or do not believe that you have the proper materials to safely perform your job?
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!