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Dahasolnce [82]
3 years ago
15

The shareholders need to earn 20%. The firm can borrow at 5%. The risk free rate is 2%. The tax rate is 40%. Find the weighted a

verage cost of capital.
Business
1 answer:
lbvjy [14]3 years ago
3 0

Answer:

11.5%

Explanation:

The computation of the weighted average cost of capital is shown below:

= Weightage of debt × cost of debt × ( 1- tax rate) + (Weightage of  common stock) × (cost of common stock)

= (0.50 × 5%) × ( 1 - 40%) +  (0.50 × 20%)

= 1.5% + 10%

= 11.5%

Basically we multiplied the weightage of capital structure with its cost so that the weighted average cost of capital could come

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Which of the following statements is CORRECT?
Oduvanchick [21]

Answer:

d. The statement of cash flows shows how much the firm's cash, the total of currency, bank deposits, and short-term liquid securities (or cash equivalents), increased or decreased during a given year.

Explanation:

In a statement of cash flows , what we have shown is a summary of cash and also all equivalents if cash that goes into and also goes out if a firm or company. It provides to what extent that cash is being managed by a firm. Therefore option D is the answer to this question since it talks about how cash increases or decreases in a firm in a particular year

5 0
2 years ago
While establishing an overall picture of process output over time, the team plots a chart based on the data available. The plott
kvv77 [185]

Answer: None of the answers

Explanation:

The options to the question are:

A) The control limits are too tight

(B) The control limits are acceptable

(C) The control limits are too loose

(D) None of the answers.

According to the seven run rule, a process is out of control in a control chart in a situation whereby there are seven consecutive data points that all fall on same side of mean. In such case an adjustment has to be made.

In the scenario in the question, none of the answers will be chosen because there has been a violation of the seven run rule as the answers provided are all incorrect.

5 0
3 years ago
Thomlin Company forecasts that total overhead for the current year will be $11,898,000 with 156,000 total machine hours. Year to
weqwewe [10]

Answer:

Predetermined manufacturing overhead rate= $76.27 per machine hour

Explanation:

Giving the following information:

Thomlin Company forecasts that total overhead for the current year will be $11,898,000 with 156,000 total machine hours.

<u>To calculate the predetermined manufacturing overhead rate we need to use the following formula:</u>

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= 11,898,000 / 156,000

Predetermined manufacturing overhead rate= $76.27 per machine hour

4 0
3 years ago
Gary wants to create a perceptual map for positioning using the attribute-based approach. He comes to you for advice as to how h
Bad White [126]

Answer:

a. Determine the specific questions to be used for the two types of ratings: (1) How does our company rate on a number of attributes? (2) How important is each of these attributes?

Explanation:

            Perceptual map may also be called as Market Mapping. It is a diagrammatic technique that is used by the asset marketers which attempts to visually display the perceptions of the customers or the potential customers. Positioning of the brand is influenced by the customer perceptions rather than those of any businesses.

            In the context, Gary in order to form a perpetual map for the positioning, he should first determine some specific questions for the two types of the ratings -- how his company rate on the number of the attributes and the importance of these attributes.

Hence, option (a) is correct.

3 0
3 years ago
Pike Corporation has total stockholders' equity of $8,690,000 as of December 31, 2017. The company has 300,000 shares of $2 par
mrs_skeptik [129]

Answer:

$22

Explanation:

Book value per share of common stock=$8,690,000-(20,000*100)-(20,000*100*8%)/300,000

=$8,690,000-$2,000,000-$160,000/300,000

=$22

6 0
3 years ago
Read 2 more answers
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