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Otrada [13]
4 years ago
15

MV Corporation has debt with market value of $ 95 ​million, common equity with a book value of $ 102 ​million, and preferred sto

ck worth $ 20 million outstanding. Its common equity trades at $ 48 per​ share, and the firm has 5.6 million shares outstanding. What weights should MV Corporation use in its​ WACC? g
Business
1 answer:
irakobra [83]4 years ago
4 0

Answer:

Total market value $383.8 million

Debt is 24.75%

Preferred stock is 5.21%

Common equity is 70.03%

Explanation:

Calculation of the weights that MV Corporation should use in its WACC

Debt value : $95 million

Preferred stock value : $20 million

Market value of common equity:

$48 per share×5.6million shares= $268.8 million

Total market value of firm: $95 +20 +268.8 =$383.8 million

Weights for WACC calculation:

Debt =95/383.8

=24.75%

Preferred Stock =20/383.8

=5.21%

Common Equity =268.8/383.8

=70.03%

Therefore the total market value of the firm will be $383.8 million Debt is 24.85% of the total value, preferred stock is 5.21%, and common equity is 70.03%

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Of the following, which is the best reason for using activity-based costing? a. to keep better track of overhead costs b. to ass
ira [324]

Answer:

d. to better assign overhead costs to products

Explanation:

Activity-based costing is a method in which the overhead costs are assigned to the goods and this helps to create a relationship between the costs and the products to have a better understanding of the costs involved in the manufacturing process. According to this, the answer is that  the best reason for using activity-based costing is to better assign overhead costs to products.

3 0
3 years ago
Which of the following is a substantive culture-changing action that a company's managers can undertake to alter a problem cultu
adelina 88 [10]

Answer:

B. Revise policies and procedures in ways that will help drive cultural change and replace senior executives who are resisting and obstructing needed organizational and cultural changes.

Explanation:

Culture of a company are the accepted ways of doing things on a daily basis with a view of achieving organisational goals. It includes the way employees interact with one another and their customers, procedures carrying out tasks, and so on.

The management of the company are the drivers of company culture, so a substantiative culture-changing action that can be taken to solve a problem culture will include replacing senior executives who are resisting and obstructing needed organizational and cultural changes, and revising policies and procedures in a way that will drive culture change

6 0
4 years ago
Explain the role of a good business plan in setting up your business. Why is it an important step
krok68 [10]

Answer:

A business plan is a very important and strategic tool for entrepreneurs. A good business plan not only helps entrepreneurs focus on the specific steps necessary for them to make business ideas succeed, but it also helps them to achieve short-term and long-term objectives.

Explanation:

It is important to help articulate a strategy for your business. It also provides insight on steps to be taken, resources required for achieving your business goals and a timeline of anticipated results. And help your business prosper and grow.

5 0
3 years ago
Hal is enrolled for one class at a local community college; tuition cost him $190. Hal's AGI is $20,000. Before considering a li
netineya [11]

Answer:

the lifetime learning credit is $38

Explanation:

The computation of the lifetime learning credit is shown below:

= 20% of tuition cost

= 20% of $190

= $38

Hence, the lifetime learning credit is $38

We simply applied the above formula so that the correct value could come

And, the same is to be considered

he is eligible for 20% only so the same is relevant

6 0
3 years ago
In an imaginary economy, consumers buy only razors and cologne. The fixed basket consists of 6 razors and 4 bottles of cologne.
Hitman42 [59]

Answer:

The answers are:

  1. The CPI for 2009 is 100 (since it is the base year)
  2. The CPI for 2010 is 129.17
  3. The inflation rate for 2010 is 29.17%

Explanation:

<u>CPI basket for 2009</u>

  • 6 razors x $20 per razor = $120
  • 4 bottles of cologne x $30 per bottle = $120

The total value of the CPI basket for 2009 is $240

<u>CPI basket for 2010</u>

  • 6 razors x $25 per razor = $150
  • 4 bottles of cologne x $40 per bottle = $160

The total value of the CPI basket for 2010 is $310

  1. The CPI for 2009 is 100, since it is the base year
  2. The CPI for 2010 = (CPI basket 2010 / CPI basket 2009) x 100 = ($310 / $240) x 100 = 129.17
  3. The inflation rate for 2010 = [(CPI basket 2010 / CPI basket 2009) - 1] x 100 = (1.2917 - 1) x 100% = 29.17%

3 0
3 years ago
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