Answer:
9.315%
Explanation:
The computation of WACC is shown below:-
But before that we need to do the following calculations
PV -$1,000
PMT 80
N 20
FV $1,000
Compute IY 8%
After tax cost of Debt = Before tax cost of debt × (1 - tax rate)
= 8% × (1 - 25%)
= 6%
According to the CAPM,
Cost of Equity =Risk free Rate + (Beta × Market Risk Premium)
= 4.5% + (1.2 × 5.5%)
= 11.10%
Weight of Equity = 100% - 35%
= 65%
WACC = (Weight of Equity × Cost of Equity) + (Weight of debt × Cost of debt)
= (65% × 11.10) + (35% × 6)
= 9.315%
An individual stockholder is entitled to receive any dividends declared on stock owned, provided the stock is held on the ex-dividend date. This is the date that is scheduled by the stock exchange. It is the date where you are entitled as the owner of a stock.
Answer:d
Explanation: Economic instability can include a volatile inflation rate and volatile rate of economic growth. It can involve higher unemployment and uncertainty about the economic cycle.
big fall in stock markets can trigger falls in consumer confidence and lead to a recession. The Wall Street crash of 1929 was a primary cause of the great depression. However, the stock market crash of 1987 did not cause an economic downturn. In fact, in the UK it was followed by an unprecedented economic boom. This was partly due to the way the government responded by cutting income tax and cutting interest rates. Interest rates are used as a tool in controlling inflation. However, they can also have an impact on consumer spending. Sometimes interest rates may have little impact; however, if they coincide with other factors they can cause a much bigger than expected fall in consumer spending. For example, in the UK, many homeowners have a variable mortgage. Therefore a small change in interest rates can have a big effect on disposable income. If an increase in interest rates was combined with another factor such as the slowing down of house price growth it may cause a big fall in spending. Number One priority to Target Economic growth and reduce unemployment. At the very least, economic growth needs to be close to long run trend rate 2.5%; it actually needs to be higher to catch up with lost spare capacity. Strong growth will help boost tax revenues and reduce unemployment. It is only in this climate you can successfully reduce the deficit. There is supply-side unemployment, especially in Europe, which has seen prolonged structural unemployment in past two decades. But, the fundamental cause is lack of aggregate demand
Answer:
Gross pay
Explanation:
Gross pay is before all taxes and deductions. Therefore that value is greater than net pay which is after all taxes and deductions
A competitive market economy with low barriers to entry affords an entrepreneur with
the opportunity to bring new and different products and services to the market.
