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butalik [34]
3 years ago
11

1. Sorensen Systems Inc. is expected to pay a $2.00 dividend at year end (D1 = $2.00), the dividend is expected to grow at a con

stant rate of 5.0% a year, and the common stock currently sells for $50.00 a share. The before-tax cost of debt is 7.00%, and the tax rate is 45%. The target capital structure consists of 40% debt and 60% common equity. What is the company’s WACC if all the equity used is from retained earnings? (Answer: %)
Business
1 answer:
Alinara [238K]3 years ago
4 0

Answer:

6.94%

Explanation:

The computation of the company WACC is shown below:

= Weightage of debt × cost of debt × (1 - tax rate)  + (Weightage of  common stock) × (cost of common stock)

where,

Cost of common stock is

= Dividend ÷ Stock price + Growth rate

= $2 ÷ 50 + 5.0%

= 4% + 5%

= 9%

So, the company WACC is                                                                              

= (0.40 × 7%) × ( 1 - 45%) +  (0.60 × 9%)

= 1.54% + 5.4%

 = 6.94%

Hence, the company WACC is 6.94%

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ivanzaharov [21]

Answer:

reverse annuity mortgage

Explanation:

The term that is being described is known as a reverse annuity mortgage. Like defined in the question, this is a loan that allows you to cash in some of your home's equity without actually needing to sell the entire real estate property and move out of your home. Instead the loan is secured against the value of your home and monthly payments are paid to the owner that asked for the loan.

6 0
3 years ago
Amounts withheld from employee's earnings for employee income tax is considered a _____ by the employer until the government is
Komok [63]

Amounts withheld from employee's earnings for the employee income tax is considered a liability by the employer until the government is paid

What is liability?

Liability means the obligation that one party owes another, whose settlement requires the indebted party to transfer cash or equivalent value of other benefits commensurate to the liability to the other party.

In this case, the employees owe the government income taxes, whereby the employees have discharged the obligation by having the employers deduct them from their earnings.

The onus is now on the employers to make payments in respect of the income taxes withheld to the tax authority, prior to which the taxes are treated as the employer's liability.

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Missing options:

(A) assets. (B) liabilities. (C) salary expense. (D) revenue.

7 0
2 years ago
A ______ the supply curve represents a change in supply while a ______ the supply curve represents a change in the quantity supp
Arisa [49]

A <u>shift </u><u>of</u> the supply curve represents a change in supply while a <u>movement </u><u>along</u> the supply curve represents a change in the quantity supplied.

Supply is defined in economics as the total amount of a specified product or service offered to consumers by a supplier at a specified time and price level. This is usually determined by market movements. For example, increased demand may prompt suppliers to increase supply.

In economics, supply is the number of goods that an individual or firm makes available in the market. This refers to the amount you are producing at a particular point in time. For example, if Apple made 100 of its iPhones, that would be the product to be launched. Supply can refer to the quantity available at a particular price or the quantity available across the price range displayed on the chart.

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7 0
1 year ago
You want to save $98,000 to buy an boat by making an equal, end of year payment into a brokerage account for the next 9 years. I
malfutka [58]

Answer:

Annual deposit= $7,930.11

Explanation:

Giving the following information:

FV= $98,000

n= 9 years

i= 0.0775

<u>To calculate the annual deposit, we need to use the following formula:</u>

<u></u>

FV= {A*[(1+i)^n-1]}/i

A= annual deposit

Isolating A:

A= (FV*i)/{[(1+i)^n]-1}

A= (98,000*0.0775) / [(1.0775^9) - 1]

A= $7,930.11

6 0
3 years ago
Read 2 more answers
A product's package, guarantees, mass-media advertising for the product, direct marketing for the product, and the selection of
jek_recluse [69]

Answer:

The correct answer is D) marketing inputs.

Explanation:

Marketing inputs: Marketing activities in the company are a direct attempt to reach, inform and persuade consumers to buy and use their products.

Input is a term applied in the field more than all economic and marketing, but basically it can be said that an input is any element that represents a fraction in the development of a product, understood as a product, everything that is produced for a given end. An input is all that material used in the manufacture of something larger, usually we associate it with the basic diet, this is because the ingredient of a food, however edible, individually, does not represent a complete food bolus, with a Standard regulation of each of its components, so it is considered as an input, as part of a whole.

8 0
2 years ago
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