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RoseWind [281]
3 years ago
11

Sixx AM Manufacturing has a target debt—equity ratio of 0.55. Its cost of equity is 16 percent, and its cost of debt is 10 perce

nt. If the tax rate is 33 percent, what is the company's WACC?
Business
1 answer:
Natalija [7]3 years ago
8 0

Answer:

WACC = Ke(E/V) + Kd(D/V)(1-T)

WACC = 16(100/155) + 10(55/155)(1-0.33)

WACC = 10.3226 + 2.3774

WACC = 12.7%

Explanation:

WACC is a function of cost of equity and proportion of equity in the capital structure  plus after-tax cost of debt and proportion of debt in the capital structure. Since debt-equity ratio is 0.55(55/100), it implies that the total value of the firm is 55 + 100 = 155. Thus, debt proportion will be 55/155 while equity proportion is 100/155.

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Which of the following is most likely to be a primary data source:
love history [14]

Answer:

d. A customer survey

Explanation:

Data collected by researchers for the first time for a specific study is primary data.  A customer survey is a method of collecting primary data. A customer survey gathers information on the research topic directly from respondents.

Primary data like surveys are costly and consume time to collect, unlike secondary data. Other methods of collecting primary data include administering questionnaires, direct or indirect personal interviews, field observations, and experiments.

7 0
3 years ago
(Learning Outcome 2) Watson Plumbing performed plumbing services for ABC Daycare on account for $565. How will this transaction
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Answer:

ABC Daycare

Effect of Performing Plumbing Services on account on the Accounting Equation:

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Explanation:

a) Data and Analysis:

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The accounting equation that equals assets to liabilities and equity is always true at all times and with every correctly posted transaction.  It implies that assets are financed through the contributions made by either the owners (equity) or the creditors (debts), or a combination of the two.  This equation forms the basis for the double-entry system of financial accounting.

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3 years ago
Bank reconciliations are normally prepared on a monthly basis to identify adjustments needed in the depositor's records and to i
joja [24]

Answer:

B.

Explanation:

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Therefore they will be no need for adjustment to be recorded for bank errors, outstanding checks, and deposits in transit.

4 0
3 years ago
For each of the following scenarios, determine if it is an indicator of potential cash flow problems: (Hint: Review Chapter 5 Po
inn [45]

Answer:

a) yes

b) no

c) yes

d) no

Explanation:

a) if the A/R balance grow higher than the sales is an indicator that our collection cycle increase thus, customer extend their financiation providing less cash flow

b) this is the opposite as (a)  here we extend our financing agaist our suppliers. The payment cycle increases thus, decreasing the overall cash demand

c) If the assets were puirchased on cahs a huge amount was used alrady affecting the liquidity of the company.

If the company finance the purchase of the long term assets, in the future the company will have to dedicate a portion of their future cahs flow to pay up interest and principal which is what we should analize; wether or not the company will have difficulties in the future and the answer is yesin both scenarios.

d) no. It will not, as marketable securities are generally short-term and easily converted into cash in the short term. They do not generate cash flow problems in the long run as the company can sale them anytime to obtain cash.

6 0
3 years ago
German and Japanese firms are viewed as having a _____ advantage in exporting compared to U.S. firms.
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Answer:

bigger is the correct answer.

Explanation:

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2 years ago
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