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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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decrease in the day's sales inventory

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This situation will be reflected in the firm's financial ratios in the form of a decrease in the day's sales inventory.

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gulaghasi [49]

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1 year ago
Explain the concepts of unitization and cube utilization. how are they related to benefit reducing transportation costs?
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Cube utilization is expressed as a percentage between 0% - poor and 100% - excellent, accordingly. So if you have filled every available spot in your warehouse with product, then you have 100 percent warehouse cube utilization.

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2 years ago
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jekas [21]
The best and most correct answer among the choices provided by your question is the fourth choice or letter D.

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I hope my answer has come to your help. Thank you for posting your question here in Brainly. We hope to answer more of your questions and inquiries soon. Have a nice day ahead!
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3 years ago
Stevens Company has had bonds payable of $10,000 outstanding for several years. On January 1, 2018, when there was an unamortize
katovenus [111]

Answer:

-$3,000

Explanation:

Data provided in the given question:-

bonds payable = $10,000

unamortized discount = $2,000

purchased bonds = $11,000

The computation of the consolidated gain or loss on a consolidated income statement for 2018 is given below :-

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