Answer:
WACC without debt is higher by = 1.7%
Explanation:
<em>The weighted Average cost of Capital (WACC) is the average cost of capital for the different sources of long-term capital available to a firm weighted according to the proportion each source of finance bears to the total capital in the pool..</em>
To determine the amount by which WACC would be higher, is the difference between WACC with and without debt.
WACC using debt
<em>Step 1</em>
Cost of debt = Before tax cost of debt × (1-T)
= 7%× (1-0.21) = 5.5%
Step 2
<em>Market value of debt and equity</em>
Market of debt = 200 million
Market value of equity = $55 × 10 = $550 million
Total market value = 550 + 200 = $750 million
Step 3
WACC with debt = ((5.5%× 200) + (12%.× 550))/ 750
= 10.3%
WACC without debt (i.e only equity)
WACC without debt = cost of equity = 12%
Difference in WACC between with and without debt
= 12%- 10.3%
= 1.7%
The WACC without debt is higher by 1.7%
Answer:
c. you need a lot of money to buy a home
Explanation:
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The profit margin of the Southern division of Knucklehead Company is 12.5%.
<h3>What is meant by profit margin?</h3>
Profit margin evaluates how much of each dollar in sales or services your company retains from its earnings and is stated as a percentage. When the net income of the business is divided by the net sales or revenue, the result is the profit margin. Profit margin is calculated as profit multiplied by revenue.
There is a net profit margin as well as a larger gross profit margin (smaller). A bigger profit margin is always preferred because it indicates that the business makes more money from its sales. Profit margins indicated in percentage, however, might differ by industry. Retail businesses may have lower profit margins than growth companies, but they make up for this with bigger sales volumes.
A division's return on investment (ROI) = profit margin x investment turnover.
Given:
0.15 = profit margin x 1.20.
Profit margin = 0.15 / 1.2 = 0.125
So, 0.125 x 100 = 12.5%
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A leverage by is one where there is.
Answer:
B
Explanation:
Insurance verification cannot be performed until the patient arrives for services
