1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
DiKsa [7]
3 years ago
8

Bartlett Company's target capital structure is 40% debt, 15% preferred, and 45% common equity. The after-tax cost of debt is 6.0

0%, the cost of preferred is 7.50%, and the cost of common using reinvested earnings is 12.75%. The firm will not be issuing any new stock. You were hired as a consultant to help determine their cost of capital. What is its WACC?a. 8.98%b. 9.26%c. 9.54%d. 9.83%e. 10.12%.
Business
2 answers:
Umnica [9.8K]3 years ago
7 0

Explanation:

can you help me on a question please .Which strategy should individuals working in a diverse workplace adopt?

dezoksy [38]3 years ago
5 0

Answer:

The answer is b. 9.26%

Explanation:

The capital structure of a company consists mainly of debt and equity. In this question, preferred stock (a mixture of debt and equity), is introduced to the capital structure. The Weighted Average Cost of Capital (WACC) is a calculation that is carried out to evaluate the profitability of a company by investors or creditors. It depicts the ability of a company to generate cash flows needed to pay debt or distribute returns to their shareholders. The management of a company can also use this calculation to determine how purchasing assets or embarking on a project financed by debt or equity will impact the profitability of a company or its share price.

The calculation of WACC is carried out as follows:

E/V*Re + D/V*Rd *(1-T) where:

  • E is market value of equity
  • D is the market value of debt
  • Re is the cost of equity
  • Rd is the cost of debt
  • V: is the total market value of financing, that is E + D
  • E/V: percentage of financing that is from equity
  • T: corporate tax rate
  • D/V: percentage of financing that is from debt

From this formula, the computation of WACC is conducted as follows:

The cost of equity: 0.45 * 12.75% = 5.7375%

The cost of debt: 0.4 * 6.00% = 2.4%

The cost of preferred: 0.15 * 7.50% = 1.125%

WACC = 5.7375% + 2.4% + 1.125% = 9.2625%

You might be interested in
The concert promoters of a heavy-metal band, WeR2Loud, know that there are two types of concert-goers: die-hard fans and casual
Reika [66]

Answer:

B) $125,000

Explanation:

Price discrimination strategy refers to charging each customer the maximum amount of money he/she is willing to pay for a product.

In this case, the concert promoters should charge $150 per ticket to 1,000 die hard fans  = $150,000 in revenue.

Then it should charge only $50 per ticket to 500 casual fans = $25,000 in revenue.

Total revenue             = $150,000 + $25,000 = $175,000

<u>minus total costs        = ($50,000)    </u>

Net income                 = $125,000

6 0
3 years ago
In January of 2015, the appropriate construction cost index had a value of $3,260. In January of 2005, the value was $1,746. In
Dennis_Churaev [7]

Answer:

11.63 million dollar

Explanation:

In 2005 the construction cost index was 1746 , in 2015 , it was 3260.

change in index in 10 years  = 3260-1746 = 1514

change in 5 years ( estimated ) = 757

Estimated index in 2010 = 1746 + 757

= 2503

Estimated index in 2020  = 3260 + 757

= 4017

Value of building in 2010 = 1746 million dollar

Value of similar building - X

X / 1746 = index in 2020 (probable ) / index in 2010

X / 7.25 = 4017 / 2503

X = 11.63 million dollar

8 0
3 years ago
Kaspar Corporation makes a commercial-grade cooking griddle. The following information is available for Kaspar Corporation's ant
Leto [7]

Answer:

Total cost per unit is $77

Explanation:

Fixed manufacturing overhead per unit = Total fixed manufacturing overhead ÷ Number of units

= $478,800 ÷ 34,200 = $14 per unit

Fixed selling and administrative expenses per unit = Total Fixed selling and administrative expenses ÷ Number of units

= $171,000 ÷ 34,200 = $5 per unit.

Total cost per unit = Direct material + Direct labor + Variable manufacturing overhead + Fixed manufacturing overhead + Variable selling expenses + Fixed selling expenses

Total cost per unit = $15 + $5 + $11 + $14 + $5 + $5 = $55 per unit.

Markup = 40% of total cost = $55 × 40% = $22

Therefore, total selling price per unit = Cost per unit + Markup

= $55 + $22 = $77 per unit.

7 0
3 years ago
27. You want to have $1 million in your savings account when you retire. You plan on investing a single lump sum today to fund t
Serjik [45]

Answer:A and C

Explanation:

Interest is compounded in savings accounts and me to reduce the amount that I must deposit today and still have my desired $1 million on the day I retire then I should either, invest in a different account paying a higher rate of interest meaning the invested amount will be compounded at a higher rate thus my initial investment amount requirement reduced. Or, since compounded interest is a function of time, if I retire later, that would mean a longer time for my initial investment to compound to $1 million, thus reducing my initial investment amount requirement.

5 0
3 years ago
Glumhoff​'s Packaging Department had the following information at July 31. All direct materials are added at the end of the conv
katovenus [111]

Answer:

Explanation:

The total equivalent units of direct materials and conversion costs for the month has been computed and attached.

Note that the conversion cost for the ending work in process was calculated as:

= $35,000 × 28%

= $35,000 × 0.28

= $9,800

Check the attachment for further analysis.

6 0
3 years ago
Other questions:
  • A benefit of using GDP per capita instead of GDP is that GDP: takes into account the size of the population when measuring the v
    8·1 answer
  • This question refers to flexibleminusbudget variance formulas with the following descriptions for the​ variables: A​ = Actual; B
    8·1 answer
  • You purchased an airplane for $500,000 and will depreciate it using a 7-year an MACRS. Salvage value in year 4 is expected to be
    12·1 answer
  • This year, the annual tuition at a public four-year university is $5,290. Next year when Jarrod attends his first year, the tuit
    7·2 answers
  • What is the primary purpose of insurance? A) To pay for your mistakes B) To take money away from you C) To protect you against a
    15·2 answers
  • 2. A series of five constant dollar (or real-dollar) payments, beginning with $6,000 at the end of the first year, are increasin
    6·1 answer
  • Fuzzy Tail Industries produces wooden picnic tables for fuzzy creatures (hamster and squirrel size are its most popular products
    9·1 answer
  • Teall Corporation has a standard cost system in which it applies manufacturing overhead to products on the basis of standard mac
    15·1 answer
  • Unit test Review
    8·1 answer
  • Which of these statements about game design is FALSE?
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!