I the second one is more risky I'm not really that good at business
a.
WACC is calculated as –
WACC = (Weight of common stock X Cost of common stock) + (Weight of preferred stock X Cost of preferred stock) + (Weight of debt X After tax cost of debt)
WACC = (64% X 13.4%) + (9% X 6.4%) + (27% X ((1- 40%)*8.1%))
WACC = 10.46%
b. After tax cost of debt is calculated as –
After tax cost of debt = (1- tax rate) X cost of debt pre-tax
After tax cost of debt = ((1- 40%)*8.1%))
After tax cost of debt = 4.86%
Answer: the accumulation of American dollars in foreign hands has enabled foreign firms to build factories in America.
Explanation:
Trade deficit is a situation whereby the expenses incurred is more than the revenue gotten.
One of the consequences of the U.S. trade deficit is that the accumulation of American dollars in foreign hands has enabled foreign firms to build factories in America.
