Answer:
- Division A - $173,710
- Division B - $239,600
Explanation:
First determine the fringe benefits per employee for the whole company;
= 413,310 / 69
= $5,990 per employee
Division A has 29 employees so the fringe benefit cost is;
= 29 * 5,990
= $173,710
Division B has 40 employees so the fringe benefit cost is;
= 40 * 5,990
= $239,600
Answer:
the weighted average cost of capital is 11.57 % .
Explanation:
Market Value of Equity = Number of Common Shares Outstanding × Market Price per share
= 30,000 shares × $15
= $450,000
Market Value of Debt = Face Value × 82%
= $280,000 × 82%
= $229,600
WACC = Ke × (E/V) + Kd × (E/V)
= 14.00 % × ($450,000/ $679,600) + 6.80 % × ($229,600/ $679,600)
= 9.27 % + 2.30 %
= 11.57 %
Fees charge = 2%
Investment worth = $500,000
Amount due = 2/100 * 500,000 = 10,000
The amount Andrew will receive as compensation is $10,000.