Answer:
a) 9.00 %
b) 7.80 %
c) yes the weight of the debt increases here is more risk in the investment as the debt payment are mandatory and failing to do so result in bankruptcy while the stock can wait to receive dividends if the income statement are good enough
d) 9.00 %
e) The increase in debt may lñead to an increase in return of the stockholders if they consider the stock riskier than before and will raise their return until the WACC equalize at the initial point beforethe trade-off occurs
Explanation:
a)
Ke 0.12
Equity weight 0.5
Kd(1-t) = after tax cost of debt = 0.06
Debt Weight = 0.5
WACC 9.00000%
c)
Ke 0.12
Equity weight 0.3
Kd(1-t) = after tax cost of debt = 0.06
Debt Weight 0.7
WACC 7.80000%
d)
<em>Ke 0.16</em>
Equity weight 0.3
Kd(1-t) = after tax cost of debt = 0.06
Debt Weight 0.7
WACC 9.00000%
Answer:
a) 75600.
Explanation:
Given;
Beginning Work in Process = 19900
Ending Work in Process = 65300
Units Transferred Out Units = 30200
Total units are to be accounted= x
19900 - 30200 + x = 65300
x = 65300 - 19900 + 30200
x = 75,600
Answer:
The answer to the question is B I51,753 bonds
Explanation:
The present price of the bond and the total amount to be raised of $170m were used in arriving at the number of bonds to be issued.
n 20
Coupon 6.60%
YTM 7.7%*1000=77
FV 1000
PV ($1,120.25)
The current price of the bond $1,120.25
Total amount to be raised $170,000,000
Number of bonds to be issued=total amount /bond price 151,752 approx...151753
Find attached spreadsheet with formulas so as to be able to follow through.
When there is a decrease in supply, it would be reflected by a change from Curve A to Curve C.
<h3>How are supply decreases reflected?</h3>
When supply decreases, it leads to the supply curve shifting to the left to show that there is a lesser quantity available.
In the graph therefore, a decrease in supply would be shown as a shift from Curve A to Curve C or Curve B to Curve A.
Find out more on decreases in supply at
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<u>Answer:</u>
<em>Mixed economics places some limits on the safety of society.
</em>
<em></em>
<u>Explanation:</u>
As the name infers, a mixed economy is a type of framework where all exercises underway, just as those performed by private and government substances, mix free enterprise with different sorts of regulations. Both the general population and individual parts can work similarly, which implies that financial advancement will be speedier.
This is particularly evident, thinking that financial assets will be used effectively. Additionally, the consumption of assets will be backed off. What's more, the legislature would likewise attempt to build up every division of the population.
