Answer:
c. 7.67%
Explanation:
The formula to compute 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 equity equals to
= (Current year dividend ÷ price per share) + growth rate
= ($2.50 ÷ $52.50) + 5.50%
= 4.76% + 5.50%
= 10.26%
The other things would remain the same
Now put these values to the above formula
So, the value would equal to
= (0.45 × 7.5%) × ( 1 - 40%) + (0.55 × 10.26%)
= 2.025% + 5.643%
= 7.67%
Answer:
$267,500
Explanation:
First-year sales are $250,000
Second-year sales will increase by 7 percent.
The first-year sales were 100%, second-year sales should be 107%
The first-year sale was $250,00; second-year sale will be 107% of $250,00
= 107/100 x 250,00
=1.07 x $250,000
=$267,500
Answer:
d. All of these answer choices are correct.
Explanation:
Based on the information given as a result of this event their Paid-in Capital in Excess of Par account will increased with amount of $2,000,000 while their total stockholders‘ equity will be unaffected and lastly the Stock Dividends account will increased
by the amount of $6,000,000 which is calculated as :
Stock Dividends account=2,000,000 *.20*(25%*20+$10)
Stock Dividends account=2,000,000 *.20*$15
Stock Dividends account=$6,000,000
Answer:
14.06%
Explanation:
Assume their is a cash out flow today of $100000, and next four year annual cash inflow of 10000 and 120000 at the end of year 4.
We can use IRR formula to find the interest rate.
year cashflow
0 -100000
1 10000
2 10000
3 10000
4 130000
IRR 14.06%
The calculation has been done on excel sheet
Answer:
Elastic
Explanation:
Elasticity = 25% / 20% = 1.25
The demand is elastic .
Demand is elastic if the coefficient of elasticity is greater than 1.
If demand is elastic, it means a change in price leads to a greater change in the quantity demanded.
I hope my answer helps you