1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Kobotan [32]
3 years ago
15

El Capitan Foods has a capital structure of 37% debt and 63% equity, its tax rate is 35%, and its beta (leveraged) is 1.45. Base

d on the Hamada equation, what would the firm's beta be if it used no debt, i.e., what is its unlevered beta, bU?1.050.731.240.860.80
Business
1 answer:
natka813 [3]3 years ago
6 0

Answer:

1.050

Explanation:

Data provided in the question:

Debt = 37% = 0.37

Equity = 63% = 0.63

Tax rate = 35% = 0.35

levered beta = 1.45

Now,

Using the Hamada equation

Levered beta = Unlevered beta × [ 1 + (1 - tax rate) × Debt-equity ratio ]

Thus,

1.45 = Unlevered beta × [ 1 + (1 - 0.35 ) × ( 0.37 ÷ 0.63 )]

or

1.45 = Unlevered beta ×  [ 1 + 0.65 × ( 0.37 ÷ 0.63 )]

1.45 = Unlevered beta ×  1.382

or

Unlevered beta = 1.049 ≈ 1.050

Hence,

The answer is option 1.050

You might be interested in
Does the amount of effort that you put into your courses increase or decrease the marginal cost of your education? Explain your
velikii [3]

The amount of effort that you put into your courses increases the marginal

cost of your education.

Marginal cost refers to the incremental cost which is accrued as a result of

increase in goods and services.

In this scenario, amount of effort put into courses entails more time and

money spent from buying of books and other materials. This therefore

depicts an increase in the incremental and marginal cost.

Read more about Marginal cost here brainly.com/question/16615264

4 0
2 years ago
Mammoth Foods, a major agricultural corporation, recently purchased MJS Organic Foods Co. MJS was established six years ago and
Alexandra [31]

Incomplete question. The option read;

A) star

B) cash cow

C) dog

D) problem child

E) top gun

Answer:

<u> A) star</u>

Explanation:

Note, the Growth-Share Matrix is designed to assist companies in determining which among their investment portfolio is worth directing resources and capital into and that would be most profitable. It is represented in four quadrants.

Among all the quadrants, the Star quadrant is meant for investments with great future potential. We could recall that there's a positive projection for MJS, it was said that the<em> "fruit market is expected to have a double-digit growth rate over the next decade." </em>Hence,  MJS would most likely be classified as a star.

7 0
2 years ago
Procter &amp; Gamble’s June 30, 2016, financial statements reported the following (in millions): Cash, beginning of year $ 6,836
lina2011 [118]

Answer:

(9,594)

Explanation:

The net cash movement during a period the sum of cashflow from operations (CFO), cashflow from investing activities (CFI) and cashflow from financing (CFF) activities. On the other hand, that net cash movement is also calculated as the difference between end of year cash position and start of year cash position. Given that, we have the equation as below:

End of year cash position - Start of year cash position = CFO + CFI + CFF

Putting all the number together, we have:

7,102 - 6,836 = 15,435 - 5,575 + CFF

Solve the equation, we have CFF = (9,594)

5 0
3 years ago
Define incentive. Provide an example of a financial and a non financial incentive....
Montano1993 [528]

An incentive is a thing that motivates or encourages one to do something.

Financial incentives can include things like bonuses, raises, paid time off, and other things that involve money.

Non-Financial incentives include things like recognition, respect, career development opportunities, retirement planning assistance, improved work environment, etc.

7 0
3 years ago
Read 2 more answers
A state charges a 7% sales tax on non-grocery items.
zvonat [6]

Answer:

$8.75

Explanation:

The sales tax is on non-grocery  is 7%

Sales tax on an item costing $125 will be

=7% of $125

=7/100 x $125

=0.07 x $125

=$8.75

7 0
3 years ago
Other questions:
  • __________ is the only formal method for ending a filibuster and requires the approval of __________ senators. cloture, fifty-on
    7·1 answer
  • A real estate office handles a 80-unit apartment complex. When the rent is $550 per month, all units are occupied. For each $25
    7·1 answer
  • In 2019, Liza exercised an incentive stock option that had been granted to her in 2016 by her employer, Weather Corporation. Liz
    8·1 answer
  • A local government awards a landscaping company a contract worth $1.5 million per year for five years for maintaining public par
    7·1 answer
  • Catherine is preparing to release a new line of toys that’s currently available for pre-order only on the landing page. Why is C
    9·1 answer
  • _______ data would be useful for creating a report containing last year's revenue, which won't be changing.
    15·1 answer
  • Mr. Decker invested $20,000 in cash in his business.<br> How does the company record the investment?
    11·1 answer
  • Why is it better to underestimate your income instead of overestimating when creating a budget?
    15·1 answer
  • The nature of the Federal Reserve can best be described as follows: a A blended public-private institution. b The Fed branches a
    5·1 answer
  • Jay and Carrie Garrett operate a small retail store in a college town that sells only house plants and accessories, which they n
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!