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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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kaheart [24]
Ok thanks for that xxx
3 0
3 years ago
You plan to buy a house in July 2019. The sale price is $350,000. You need to pay 20% down payments and borrow additional 80% fr
daser333 [38]

So your down payment would be 70,000 (which is 350,000 X .2)

So you would be financing 280,000

Using the payment function

PV= 280,000

R= .036/12

N = 15*12= 180

Your payment would be: 2,015.45

6 0
3 years ago
On November 1, 2016, Cullumber Company places a new asset into service. The cost of the asset is $78500 with an estimated 10-yea
MrRissso [65]

Answer:

$7,000

Explanation:

Depreciation: The depreciation is an expense that shows a reduction in the value of the fixed assets due to tear and wear, obsolesce, usage, time period, etc. It is shown on the debit side of the income statement. It is a non-cash item that does not affect the cash balance.  

The computation of the depreciation expense for 2017 is shown below:

= (Original cost - residual value) ÷ (useful life)

= ($78,500 - $8,500) ÷ (10 years)

= ($70,000) ÷ (10 years)  

= $7,000

In this method, the depreciation is same for all the remaining useful life

3 0
3 years ago
Knowing that accounting and reporting laws differ widely around the world thereby posing risks for the international business, b
morpeh [17]

Answer: The answer is explained below.

Explanation:

Physical asset valuation is the process used to determine the fair market value of an asset. Research and development is the process whereby a company works in order to obtain new knowledge that will be used to create new technology, services, products, or systems.

Due to the different accounting practices which are accepted by different countries, companies has to consolidate their accounting into a standard. But in a situation whereby a foreign accounting procedure is translated to an accepted and followed standard, this might lead to valuation discrepancies. Therefore, an asset valued at certain amount may fall in value due to the foreign accounting standard used when compared to local accounting standards.

The same follows with the Research and Development cost as there is currency valuations involved and the gap in values of the currencies of the two nations can lead to differences in the the total cost of the project.

7 0
3 years ago
In "Do Not Go Gentle into That Good Night”, the speaker emphasizes that older men should fight fiercely against death. The setti
Advocard [28]

The theme of the poem is about the Bravery of the military unit .hence choice 1 is correct.

<h3>What is the summary of  The Charge of the Light Brigade?</h3>

An emotional poem, The Charge of the Light Brigade, both honors and mourns the battle's action. The concept of the valiant and gallant British soldier—one whose moral obligation was to fight for justice—emerged during the Crimean War.

Tennyson honors a military unit's bravery for charging the enemy despite insurmountable odds: they are "six hundred" against an "army."

Hence the appropriate answer is Bravery.

Learn more about The Charge of the Light Brigade:

brainly.com/question/1343588

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3 0
2 years ago
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