Answer:
0.1631 ; 16.31%
Explanation:
Given:
Cost of capital = 14% = 0.14
Debt to equity ratio = 60% = 0.6
Cost of debt = 9% = 0.09
Tax rate = 23% = 0.23
Cost of equity : cost of capital + debt - to - equity ratio * (1 - tax rate) * (cost of capital - cost of debt)
Cost of equity = 0.14 + 0.60 × (1 - 0.23) × (0.14 - .09)
Cost of equity :
0.14 + 0.60 * 0.77 * 0.05
0.14 + 0.0231
= 0.1631 ; 0.1631 * 100% = 16.31%
Answer:
Statement A
Explanation:
The 2 statements are:
A: The firm Delta Insurers typically affirms claims within 120 days after it receives proof of loss statements
B: The firm Delta Insurers typically denies claims within 120 days after it receives proof of loss statements
The explanation for this is:
- The company is an insurance company
- An insurance company holds funds for their customers; to be released when the customer is less privileged or in a bad situation, depending on the type of insurance made
- There is car insurance, house insurance, life assurance, etcetera.
- So if the insurance company receives proof of loss statements from the customer, it will release funds to solve the customer's dire need
- In this case, it takes 120 days to verify, process and then agree (affirm) to release funds (claims) to the affected customer.
So the answer is Statement A.
Answer:
B. The Sherman Act allows the US government to regulate activities that restrain competition and trade
Explanation:
The Sherman Antitrust Act of 1890 was first legislation enacted by US congress. It was brought into force to regulate competition and trade among enterprises. This act prohibits agreement in restraint of trade or interference of power in trade like price fixing, bid rigging, etc.
The Sherman Act did not work for long as it restrict the business merger and people are confused about knowing the motive of the act as it is not designed properly.
Answer: 0.48
Explanation:
P(A/B) = P(AnB)/P(B) where:
P(A/B) = The probability of event A occurring given that B has occurred.
P(AnB) = The probability of both events A and B occurring.
P(B) = the probability that event B occurs.
So let
P(A) = Probability that the residents of a household own 2 cars.
P(B) = Probability that the annual household income is greater than $25,000.
The question tells us that
P(A/B) = 0.8
Note that: P(A) = 0.7, P(B) = 0.6.
Since we want to work out P(AnB), because it gives the probability that residents have an annual household income over $25,000 and own 2 cars.
We would Rearrange our initial equation to make P(AnB) the subject formula becoming;
P(A/B) = P(AnB)/P(B)
P(B)*P(A/B) = P(AnB)
So, inserting our probabilities into this equation gives:
0.6*0.8 = 0.48
Answer:
The dividends payout to preferred stockholders is $113,400 as shown below.
Explanation:
The total dividends payable to holders of preferred shares can be computed thus:
Preferred shares dividends=9000*$90*14%
Preferred shares dividends =$113,400
Preferred shareholders have prior claims to dividends ahead of ordinary shareholders,but after bondholders' interest payments have been settled.
The same way they also have precedence in the distribution of company's assets before ordinary shareholders upon the liquidation of the company.
The downside is that they cannot share in excess profits after payment of dividends as they are part-owners of the company unlike ordinary shareholders.
