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DaniilM [7]
3 years ago
8

A firm has determined its cost of each source of capital and its optimal capital structure which is comprised of the following s

ources;
Long-term debt = 45%, after-tax cost = 7%
Preferred stock = 15%, after-tax cost = 10%
Common stock equity = 40%, after-tax cost = 14%
The weighted average cost of capital for this firm is;
Business
1 answer:
barxatty [35]3 years ago
5 0

Answer:

10.25%

Explanation:

Data provided in the question:

Long-term debt = 45%, after-tax cost = 7%

Preferred stock = 15%, after-tax cost = 10%

Common stock equity = 40%, after-tax cost = 14%

Now,

The  weighted average cost of capital for this firm will be calculated as:

= Long term debt × after-tax cost + Preferred stock × after-tax cost + Common stock equity × after-tax cost

or

= 0.45 × 0.07 + 0.15 × 0.10 + 0.40 × 0.14

or

= 0.0315 + 0.015 + 0.056

= 0.1025

or

= 0.1025 × 100%

= 10.25%

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A new sports car sells for $40,000. The value of the car decreases by 12% annually. After how many years will it be worth half o
Marysya12 [62]

Answer:

n= 6.11 years

Explanation:

Giving the following information:

Present value= $40,000

Future value= $20,000

Decrease rate= 0.12

<u>To calculate the number of years for the car to reach a value of $20,000; we need to use the following formula:</u>

n= ln(FV/PV) / ln(1+i)

n= ln(20,000/40,000) / ln(1.12)

n= 6.11 years

8 0
3 years ago
What Generation expected immigrants to assimilate and become "American" to the extent of expecting to alter their names upon arr
Anna [14]
Probably millennials
3 0
2 years ago
Shipments of compact digital cameras dropped by 42% due to the industry being unable to adjust to changes in the ________.
Maslowich

Shipments of compact digital cameras dropped by 42% due to the industry being unable to adjust to changes in the technological dimension. Therefore, the option C holds true.

<h3>What is the significance of technological dimension?</h3>

A technological dimension can be referred to or considered as the dimension that is driven heavily and dependent completely upon the forces of technological developments. It is an external factor for the changes in business organizations, or the industries at large.

Therefore, the option C holds true and states regarding the significance of technological dimension.

Learn more about technological dimension here:

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Shipments of compact digital cameras dropped by 42% due to the industry being unable to adjust to changes in the

a. legal-political dimension b. economic dimension O c technological dimension O d. natural dimension

3 0
1 year ago
This chapter described various situations that emphasize the need for controls. In the first sce- nario presented, a furniture s
Alex17521 [72]

Answer:

First Scenario:

The furniture store should develop a system which helps keeps track for the purchases made on account. The system should keep track of invoices and payment due dates. The system should notify the team when the payment due date is near. The system should have controls for identifying duplicate payments.  

Explanation:

Second Scenario:

The account payable clerk should keep track of all the invoices entered in the system. The system controls should be efficient so that there is no duplicate payment or missed payment. The system should notify the user when any duplicate invoice entering attempt is made. There should be authorization of invoices before they are entered in the system. The payment process should be segregated between 2 or more users so that there is less risk for fraud.

3 0
3 years ago
Nieto Company’s budgeted sales and direct materials purchases are as follows. Budgeted Sales Budgeted D.M. Purchases January $ 2
inn [45]

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

Budgeted Sales:

January $ 237,400

February 251,400

March 336,600

Nieto’s sales are 30% cash and 70% credit. Credit sales are collected 10% in the month of sale, 50% in the month following sale, and 36% in the second month following sale; 4% are uncollectible.

Cash collection March:

Cash sales= 336,600*0.3= 100,980

Credit Sales March= (336,600*0.7*0.1)= 23,562

From February= (251,400*0.7*0.5)= 87,990

From January= (237,400*0.7*0.36)= 59,824.8

Total= 272,356.8

4 0
3 years ago
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