This is false that The optimal capital structure is the one where the percentages of debt, preferred stock, and common equity minimize the firm's value.
The best combination of debt and equity financing that increases market value while lowering a company's cost of capital is known as an optimal capital structure. One strategy for aiming for the lowest cost mix of financing is to minimize the weighted average cost of capital (WACC).
Financial management greatly benefits from having the ideal capital structure. It enables a business to efficiently raise the required capital from a variety of sources. The ratio of debt to equity in the ideal capital structure will maximize the firm's wealth. The market price per share is at its highest and the cost of capital is at its lowest with this capital structure.
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Answer:
In the context of types of rating errors, Jonathan commits the contrast error.
Explanation:
Contrast error is a concept which involves the rating of an employee according to any other employee. This is an error in which a person is compared with the other and not to any certain standard. In this concept, an individual sets a standard on which the others' work is evaluated. This type of error majorly occurs during interviews and while evaluating the performances for appraisals.
Answer: refine your approach by going back to the drawing board
Explanation:
Based on the information given, since after reviewing what identifies an ideal market, it's realize that the segmentation approach does not meet any of the effective segmentation conditions, then one should refine their approach by going back to the drawing board.
When this is done, one can then restrategize and then choose a segmentation approach that meets the effective segmentation conditions.
Answer:
1. Annual demand ( D) = 100,000 bags
Ordering cost per order (Co) = $15
Holding cost per item per annum (H) = 15% x $2 = $0.30
EOQ = √<u>2DCo</u>
H
EOQ = √<u>2 x 100,000 x $15</u>
0.30
EOQ = 3,162 units
2. Maximum inventory
= Safety stock + EOQ
= 1,500 + 3,162
= 4,662 units
3. Average inventory
= EOQ/2
= <u>3,162</u>
2
= 1,581 units
4. Number of order
= <u>Annual demand</u>
EOQ
= <u>100,000</u>
3,162
= 32 times
Explanation:
EOQ is the square root of 2 multiplied by annual demand and ordering cost per order divided by holding cost per item per annum.
Maximum inventory is the aggregate of safety stock and EOQ.
Average inventory is economic order quantity divided by 2
Number of order is the ratio of annual demand to economic order quantity.
The future value for annuity is $3030.
<h3>What is future value of an annuity?</h3>
The worth of a series of recurrent payments at a specific future date, assuming a specific rate of return, and discount rate, is the future value of the annuity. The future value of the annuity increases with the discount rate.
Some key features of future value of annuity are-
- A approach to determine how much money a stream of payments will be worth at some future date is to determine future value of an annuity.
- A present value of an annuity, on the other hand, calculates how much cash will be needed to provide a series of future payments.
- Payments are made in a typical annuity at the conclusion of each predetermined time frame.
- Payments are made at the start of each period in an annuity payable.
The formula for future value of annuity are-
F.V = P×
F.V = future value of annuity
P = Initial deposit; $1,000
r = rate of interest; 10%
Substitute the given values in the formula;
F.V = 1,000×
= 1,000×3.03
F.V = 3030
Therefore, the future value of the annuity of the deposited amount of $1,000 is $3030.
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