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11Alexandr11 [23.1K]
3 years ago
14

Initech has 7 million shares of common stock outstanding and 50,000 bonds outstanding. The bonds pay semi-annual coupons at an a

nnual rate of 9.05%, have 6 years to maturity and a face value of $1,000 each. The common stock currently sells for $30 a share and has a beta of 1. The bonds sell for 94% of face value and have a 10.42% yield to maturity. The market risk premium is 5.5%, T-bills are yielding 5% and the tax rate is 30%. What is the firm's capital structure weight for debt
Business
1 answer:
zhannawk [14.2K]3 years ago
6 0

Answer:

The firm's capital structure weight for debt is 18.29%

Explanation:

Common stock outstanding = 7 million shares

Outstanding bonds = 50,000 bonds

Calculating Value of Equity,

Total Equity = 7 million × $30 = $210 million

Calculating Value of Debt,

Total Debt = 50,000 × 1,000 × 0.94 = $47 million

Weight of Debt = 47 million ÷ (210 + 47 ) million

Weight of Debt = 18.29%

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A cafeteria buys muffins daily. Demand varies Uniformly between 30 and 50 muffins per day. The cafeteria pays $.20 per muffin an
kakasveta [241]

Answer:

The optimal stocking level is 45 muffins.

Explanation:

First we have to calculate the Overage cost Co = Purchase price - Salvage value = $0.2 - 0 = $0.2

Then the Underage cost Cu = Selling price - Purchase price =$0.80 - $0.2 = $0.60

Service level = Cu / (Cu + Co) = $0.60/($0.60+$0.2) = $0.75

Hence, optimal stocking level = Minimum demand + Service level *(Maximum demand - Minimum demand)

optimal stocking level = 30 + 0.75*(50-30) = 45

The optimal stocking level is 45 muffins.

Optimal stocking level = 68.75 Muffins

5 0
2 years ago
The Federal Reserve mandates banks to deposit a certain percentage of their ______ as required reserves at their regional Federa
nikitadnepr [17]

Answer:

deposits

Explanation:

4 0
3 years ago
According to the human relations approach, employee commitment to an organization is gained by ______. Select one: 1. economic m
NemiM [27]

Answer:

"4"

Explanation:

Human relations approach to employees management believes that employees are not only motivated by financial incentives but other factors like praises , interpersonal relationship and delegation of roles and this in return , boost their commitment.

The managers are involved in active support of employees' growth and performance.

It underscores the importance interpersonal and social relationship in a work environment.

5 0
3 years ago
Seth has a monthly income of $2,500. He has a $400 car payment and owes $225 on electronic equipment. What is the percentage of
WITCHER [35]

Answer:

25%

Explanation:

Given:

Seth has a monthly income of $2,500

He has a $400 car payment

He owes $225 on electronic equipment.

Question asked:

What is the percentage of Seth's income he is paying out in debt payments?

Solution:

He has a car payment = $400

He owes on electronic equipment = $225

<em>These two items are treated as debt for Seth as these items are used first then pay for it.</em>

Total debt =  $400 +  $225

Total debt = $625

Now, we will find percentage of Seth's income he is paying out in debt payments,

Percentage =\frac{Total \ monthly \ debt}{Total \ monthly\  income}

                  =\frac{625}{2500} \times100\\\\ =\frac{62500}{2500} \\\\ =25

Therefore, 25% of Seth's income he is paying out in debt payments.

4 0
3 years ago
Select the example that is inconsistent with the provisions of the UCC for contract remedies for a seller's breach of contract.
den301095 [7]

The example that is inconsistent with the provisions of the UCC for contract remedies for a seller's breach of contract is:

b.) A toy company sells a defective rocket launcher that injures a young boy. The sales contract excludes responsibility for all consequential damages related to the sale of its products, so the company only agrees to refund the cost of the defective toy.

<h3>What is UCC for contract remedies for a seller's breach of contract?</h3>

Consumers have up to six years to raise concerns relating to breach of contract, even though the goods under the contract may not last up to this period.  Therefore, the provision by the appliance manufacturer that buyers have a maximum of six months to raise concerns is inconsistent with the Uniform Commercial Code (UCC).  The code sets the same comprehensive laws for all commercial activities in the US.

Thus, option "C" is correct.

To learn more about UCC  click here:

brainly.com/question/13640672

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8 0
1 year ago
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