Answer:
WACC is 9.35%
Explanation:
In order for us to compute the weighted average cost of capital, we have to first find the cost of equity (Ke) and the cost of debt (Kd)
1. Ke can be found by using CAPM - Capital Asset Pricing Model.
CAPM Formula: Ke = Rf + b(Rm-Rf)
where Rf = Risk free rate; Rm = Return expected of the market; b = beta
Therefore = Ke = 3% + 0.9(11%-3%) = 10.2%
2. Kd = Coupon rate (1 - tax rate), coupon rate is 7%, tax rate is 35%
therefore Kd = 7 (1-0.35) = 4.35%
Lastly we apply the WACC Formula which is Ke* (equity value/Total value of equity and debt) + kd*(debt value/Total value of equity and debt)
We are not given the values of equity and debt, bur we are given the fractions; we will use the fractions.
Therefore: Ke* (equity value/Total value of equity and debt) + kd*(debt value/Total value of equity and debt) = (10.2%*85%)+(4.35%*15%) = 9.35%
The correct option is C. The consumer will have to pay more because the supply of gasoline will decrease, which would put upward pressure on the price.
<h3>
What is Gasoline?</h3>
Gasoline, or petrol, is a transparent, volatile, flammable liquid hydrocarbon mixture used as a fuel, especially for internal combustion engines, and usually blended from several products of natural gas and petroleum.
Thus, the tax on gasoline at the point of purchase would increase the price consumers have to pay for gasoline.
Learn more about Gasoline here:
brainly.com/question/13402652
#SPJ1
It depend on the price change if it increases sales will go down and demand will go down if it decreases sales go up demand goes up
Answer:
$ 347,818
Explanation:
Intrinsic value of property = Net operating income / Capitalisation rate
WHILE
Net operating income = Earning from property - Operating expenses which is related to property
Earning from Property =
($8600+$200)*12*85%
=$8800*12*0.85
=$89,760
Operating expenses;
Property tax $10,000
Insurance $3,500
Advertising expenses $1,500
Maintenance cost $12,500
Interest expenses $24,00
Total $51,500
Net operating income =$89,760-$51,500
=$38,260
Net operating income for perpetuity
Intrinsic value = 38260/0.11
=$ 347,818
Therefore the intrinsic value of the property is $ 347,818
Answer:
store of value, medium of exchange, unit of account
Explanation:
Money can be defined as any asset used by an individual or business entity to make purchases of goods and services at a specific period of time.
Simply stated, money refers to any asset which can be used to purchase goods and services by customers.
This ultimately implies that, money is any recognized economic unit that is generally accepted as a medium of exchange for goods and services, as well as repayment of debts such as loans, taxes across the world.
Additionally, the rate at which an asset can be used to purchase any goods or services refers to its liquidity. Thus, liquidity is a quality or characteristics of money as a medium of exchange. Therefore, money is a generally accepted medium of exchange around the world.
In economics or financial accounting, a correct listing of money's functions are;
I. Store of value.
II. Medium of exchange.
III. Unit of account.
