Answer:
WACC is 9%
Explanation:
WACC is the average cost of capital of the firm based on the weightage of the debt and weightage of the equity multiplied to their respective costs.
According to WACC formula
WACC = ( Cost of equity x Weightage of equity ) + ( Cost of debt ( 1- t) x Weightage of debt ) + ( Cost of Preferred equity x Weightage of Preferred equity )
As per given data
Market Values
Equity = $7 billion,
Preferred stock = $2 billion
Debt = $13 billion
Cost
Equity
Capital asset pricing model measure the expected return on an asset or investment. it is considered as the cost of common stock.
Formula for CAPM
Cost of Equity = Risk free rate + beta ( market return - risk free rate )
Cost of Equity = Rf + β ( Mrp )
Cost of Equity = 3% + 1.6 ( 8% ) = 15.8%
Preferred stock = $2 / $26 = 0.077 = 7.7%
Debt = 8%
Placing values in the formula
WACC = ( 15.8% x $7 billion / $22 billion ) + ( 8% ( 1- 0.3) x $13 billion / $22 billion ) + ( 7.7% x $2 billion / $22 billion )
WACC = 5.03% + 3.31% + 0.7% = 9.04%
Answer: $30000
Explanation:
Based on the information given in the question, the required reserve will be:
= $60000 × 25%
= $15000
Since the bank's required and excess reserves are equal, then the excess reserve will be $15000.
Therefore, the actual reserves will be:
= Required reserve + Actual reserve
= $15000 + $15000
= $30000
Apaper bills and coins circulated in a country are called CURRENCY. Please remember that currency is <span>a system of money in general use in a particular country. I hope this is useful. </span>
Answer:
Explanation:Part 1). Answer :- Sales of Ford Mustangs will decrease by 15 % (1.5 * 10 %).
Explanation :- Camaro and Ford Mustangs are substitute goods because the cross-price elasticity between Ford Mustangs and Camaro is in positive. Accordingly, with the decrease in price of camaro, the quantity sold of Ford Mustangs will also decrease.
Part 2). Answer :- Quantity of Ford Mustangs will decrease by 16 % (0.80 * 20 %).
Explanation :- Gasoline and Ford Mustangs are complementary goods because the cross-price elasticity between Ford Mustangs and Camaro is in negative. Accordingly, with the increase in price of gasoline, the quantity sold of Ford Mustangs will decrease.
Part 3). Answer :- Quantity of Ford Mustangs will increase by 15 % (3 * 5 %).
Explanation :- With the increase in income of consumer, the demand for normal good also increase. Accordingly, with the increase in consumer's income, quantity demanded of Ford Mustangs will also increase.
<span>Assesses the attractiveness of an SBU's market and the strength of its position in the market.</span>
