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vodka [1.7K]
3 years ago
15

You are analyzing the cost of capital for a firm that is financed with 65 percent equity and 35 percent debt. The cost of debt c

apital is 8 percent, while the cost of equity capital is 20 percent for the firm. What is the overall cost of capital for the firm?Entry field with correct answera. 12.2%b. 14.0%c. 15.8%d. 20.0%
Business
1 answer:
ExtremeBDS [4]3 years ago
8 0

Answer:

c. 15.8%

Explanation:

The cost of equity is the WACC (weighted average cost of equity)

WACC formula = wE*rE + wD*rD(1-tax) , whereby

wE = weight of equity = 65%

rE = cost of equity = 20%

wD = weight of debt=35%

rD(1-tax ) = after tax cost of debt =8%

WACC = (0.65 *0.20) + (0.35*0.08)

= 0.13 + 0.028

= 0.158 or 15.8%

Therefore, the overall cost of capital is 15.8%

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e Arlington Motor Pool Internal Service Fund had the following transactions and events during January 2018. Using the "Additiona
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Answer:

Journal Entries

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Explanation:

The Question is incomplete but i will do the typical journal entries to the transactions without figures.

1) The salaries are for one month and in brackets there is a $80,000*1/12 calculation meaning the $80,000 is for the year, now if it was already recorded then we debit salaries payable $6,667 credit bank $6,667

4) Insurance expense is debited if it is paid as it is incurred but if it has an Prepaid insurance account then we credit the Prepaid insurance account instead of Bank.

4 0
3 years ago
The equipment account had a $36,000 balance at the beginning of the year, and a $30,000 balance at the end of the year. The accu
MrMuchimi

Answer:1000

Explanation:

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6 0
3 years ago
Managers at Umbrella Corporation, a firm in East Asia, want to make their company a global leader in business process outsourcin
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The should the Umbrella managers look for as they decide where to locate their BPO facilities is an abundance of well-educated English speakers.

<h3>What does well educated mean?</h3>

The term simply implies that a  person of this kind of nature  has a lot of knowledge about a lot of subjects, usually due to the fact that they have studied at college or university.

The speakers and writers of English who have been educated are known to be very verse in English and should be the one employed by this firm.

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large, undeveloped plots of land for greenfield projects

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Learn more about  English speakers from

brainly.com/question/26157848

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