Answer:
Option (C) is correct.
Explanation:
We have to use MM proposition that cost of equity will change itself in such a manner so that it can take care of its debt.
Cost of equity:
= WACC of all equity firm + (WACC of all equity - Cost of debt ) × (Debt -to-equity ratio)
At the beginning, when there was no debt,
WACC = cost of equity = 12 %
Levered cost of equity:
= 12% + ( 12% - 6%) × 0.5
= 15%
Therefore, Rearden's levered cost of equity would be closest to 15%.
Answer:
Financial disadvantage from further processing = $(9)
Explanation:
<em>A company should process further a product if the additional revenue from the split-off point is greater than than the further processing cost. </em>
<em>Also note that all cost incurred up to the split-off point (the cost of crushing) are irrelevant to the decision to process further . </em>
$
Sales revenue after crushing 55
Sales revenue at the split-off point <u>81</u>
Additional sales revenue 26
Further processing cost <u> (35)</u>
Net income after further processing <u> (9)
</u>
Financial disadvantage from further processing = $(9)
<em>Kindly note that the allocated joint costs( cost of sugar and crushing) are irrelevant. This implies that whether or not the intermediate products are processed further the joint costs are irrelevant to the decision to process the beet juice further</em>.
Answer:
.E. sole proprietorship.
Explanation:
A sole proprietorship, also known as the sole trader, individual entrepreneurship, or proprietorship, is a type of enterprise that is owned and run by one person and in which there is no legal distinction between the owner and the business entity. Sole Proprietorship examples include small businesses, such as a single person art studio, a local grocery, or an IT consultation service. The moment you start offering goods and services to others, you form a Sole Proprietorship. It's that simple. Legally, there is no distinction between you and your business.
Answer:
How does the price of corn change if the price of wheat increase? Microeconomics
Identify the best measurement of total output in the US economy. Macroeconomics
How will an increase in government spending impact the inflation rate? Macroeconomics
The most efficient market structure is perfect competition.
Microeconomics
Answer:
1. a. Perfectly Competitive
2. b. Cannot influence prevailing market price,
3. b. Giving them role of PRICE TAKERS in market
4. True
Explanation:
Perfect Competition is market form with : Very large no of buyers & sellers, homogeneous goods, uniform prices, perfect information about good.
1 a. Homogeneous goods without any product differentiation i.e Identical goods are a primary characteristic of perfect competition
2 b. Very large no of sellers means they cannot influence the price of the product, since they have an insignificant share of entire market supply.
3. b. So, they have no price decision power & are 'price takers' of the industry prevailing price
4. It is true that 'The market for public utilities, like gas and electricity, does not exhibit the two primary characteristics that define perfectly competitive markets'. Such because these utilities sellers are either single sellers (monopoly) or less sellers (oligopoly).
