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3 years ago

Feldspar Inc. is considering the capital structure for a new division. Management has been given the following cost information:

Business

1 answer:

34kurt3 years ago

8 0

Answer:

Option 4

Explanation:

In this question ,we have to compute the WACC which is shown below:

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

For Option 1, it would be

= (0.3 × 10%) × ( 1 - 40%) + (0.7 × 12.5%)

= 1.8% + 8.75%

= 10.55%

For Option 2, it would be

= (0.4 × 10.5%) × ( 1 - 40%) + (0.6 × 13%)

= 2.52% + 7.8%

= 10.32%

For Option 3, it would be

= (0.5 × 11%) × ( 1 - 40%) + (0.5 × 13.5%)

= 3.3% + 6.75%

= 10.05%

For Option 4, it would be

= (0.6 × 11.7%) × ( 1 - 40%) + (0.4 × 14.2%)

= 4.212% + 5.68%

= 9.89%

For Option 5, it would be

= (0.7 × 13%) × ( 1 - 40%) + (0.3 × 15.5%)

= 5.46% + 4.65%

= 10.11%

So based on this, the management should accept option 4 as it derives the best debt asset ratio

The weightage of equity would be come

= 1 - weightage of debt

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You have found an ideal and unique parcel of land for your business to build its plant. You negotiate and sign and contract. Eve

Romashka [77]

Answer:

The answer is through legal redress known as Specific Performance.

Explanation:

A contract is an agreement between two or more people. It is legally binding and enforceable. Each individual must satisfy their separate obligations.

Since the contract has been signed. This means it is legally binding.

Since it is legally binding, the best course of action is to proceed to court of law.

In law, this known as Specific Performance. Specific Performance is a resolution used by competent court of law to order a party to perform a specific act like order the owner of the land to relinquish the land. Specific Performance is an equitable remedy.

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3 years ago

An investor can design a risky portfolio based on two stocks, A and B. Stock A has an expected return of 16% and a standard devi

ElenaW [278]

The proportion of the optimal risky portfolio that should be invested in stock A is 0%.

Using this formula

Stock A optimal risky portfolio=[(Wa-RFR )×SDB²]-[(Wb-RFR)×SDA×SDB×CC] ÷ [(Wa-RFR )×SDB²+(Wb-RFR)SDA²]- [(Wa-RFR +Wb-RFR )×SDA×SDB×CC]

Where:

Stock A Expected Return (Wa) =16%

Stock A Standard Deviation (SDA)= 18.0%

Stock B Expected Return (Wb)= 12%

Stock B Standard Deviation(SDB) = 3%

Correlation Coefficient for Stock A and B (CC) = 0.50

Risk Free rate of return(RFR) = 10%

Let plug in the formula

Stock A optimal risky portfolio=[(.16-.10)×.03²]-[(.12-.10)×.18×.03×0.50]÷ [(.16-.10 )×.03²+(.12-.10)×.18²]- [(.16-.10 +.12-.10 )×.18×.03×0.50]

Stock A optimal risky portfolio=(0.000054-0.000054)÷(0.000702-0.000216)

Stock A optimal risky portfolio=0÷0.000486×100%

Stock A optimal risky portfolio=0%

Inconclusion the proportion of the optimal risky portfolio that should be invested in stock A is 0%.

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brainly.com/question/21273560

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2 years ago

2. Because of the tender meat required, which of these cooking methods are the most expensive?

Vlada [557]

Answer:

The correct answer is letter "C": Steaming and broiling.

Explanation:

Steaming and broiling is the process by which food -in this case, meat- is cooked by placing it above a stove that is in heat. It enables to keep the natural flavor of the food and its nutrients. Besides, the shape and the color of the food do not suffer dramatic changes. Though, steaming ovens are expensive. Usually the cost more than $2000 (USD).

4 0

3 years ago

Read 2 more answers

Pension data for David Emerson Enterprises include the following: ($ in millions) Discount rate, 10% Projected benefit obligatio

Gelneren [198K]

Answer:

$123

Explanation:

Calculation to determine the service cost component of pension expense for the year ended December 31.

PENSION BENEFIT OBLIGATION

Beginning of the year Projected benefit obligation $360

Service cost ?

Interest cost $36

(10%*360)

Loss (gain) on PBO $0

Less: Retiree Benefits ($54)

End of the year Projected benefit obligation $465

Hence,

SERVICE COST= ($465-$360-$36+$54)

SERVICE COST= $123

Therefore the service cost component of pension expense for the year ended December 31 will be $123

5 0

3 years ago

Which of the following is not a payroll tax deduction? federal payroll tax state payroll tax FICA sales tax

Morgarella [4.7K]

Answer: The Correct Answer is Sales tax.

Explanation:

Sales tax is the Tax forced by the government body during the sale of the goods and services at a retail level.

While payroll tax is the tax which is forced on the salary of the employees and this tax is forced by the employer. payroll taxes are directly deducted from the salaries of the employees and directly paid to the internal revenue services by the employer.

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3 years ago