Answer:
weighted cost of capital for next year is 10.27 %.
Explanation:
Weighted cost of capital = Ke × (E/V) + Kd × (D/V)
Ke = Cost of Equity
= Dividend Yield + Expected growth rate
= $1.30 / $30.00 + 0.07
= 0.11333 or 11.33 %
Kd = Cost of Debt
= Interest × (1 - tax rate)
= 11% × ( 1 - 0.21)
= 8.69 %
Weighted cost of capital = 11.33 % × 60% + 8.69 % × 40%
= 10.27 %
Answer:
The value of the difference between the earnings per share (EPS) forecasts for Feast and Famine is $2.40
Explanation:
The solution is as evident in the attached Excel Sheet. In the excel sheet the formulas are used which are also given in the second sheet.
For the data values from the question are used.
Answer:
The correct answer is option D
D. The 14-year non-renewable terms for governors effectively insulate the Board of Governors from political pressure
Explanation: Option D is incorrect regarding federal reserve independence.
Answer:
Diversification for pooling risks
Explanation:
When a company wants to diversify it goes into various products in order to reach a larger market. This is the opposite of specialisation where the company focuses on one market or product.
When a company wants to diversify it will not be a good idea to do it because they want to pool risk.
Pooling of risk involves centralisation of process so that risk due to variability will be reduced.
Diversifying will increase risk due to variability.
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