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lyudmila [28]
3 years ago
13

MV Corporation has debt with market value of $ 102 ​million, common equity with a book value of $ 99 ​million, and preferred sto

ck worth $ 19 million outstanding. Its common equity trades at $ 49 per​ share, and the firm has 5.8 million shares outstanding. What weights should MV Corporation use in its​ WACC?
Business
1 answer:
just olya [345]3 years ago
4 0

Answer:

The weights to be assigned to each component in WACC calculation is are,

Debt = 25.17%

Preferred stock = 4.69%

Common Stock = 70.14%

Explanation:

The WACC or weighted average cost of capital is the cost to a firm of its capital structure which can contain the following components- debt, preferred stock and equity. To calculate the WACC, we use the market values of debt and equity in our calculation to assign weights to each component of the capital structure.

Market value of common shares = 49 * 5.8 million  =  $284.2 million

The total value of capital structure is = 284.2 + 102 + 19 = $405.2 million

<u>The weights to be used in WACC calculation is:</u>

Debt = 102 / 405.2  =  0.2517 or 25.17%

Preferred stock = 19 / 405.2  =  0.0469 or 4.69%

Common Stock = 284.2 / 405.2  =  0.7014 or 70.14%

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timurjin [86]
<span>FALSE.  You must carry insurance on motorcycles as well as cars. </span>
8 0
3 years ago
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What types of businesses are needed to make the product and deliver it to the final consumer.
Gnesinka [82]

Answer:

Manufacturing and Merchandising businesses

Explanation:

The type of Business needed to make the product is known as MANUFACTURING business. This business buys raw materials and refined them into products that later sell in bulk to wholesalers.

On the other hand, Merchandising business is a form of business that involves buying refined products at wholesale price and then sell to the final consumers.

Hence, in this case, then Greece answer is MANUFACTURING and MERCHANDIZING Business.

8 0
3 years ago
Would you expect holding cost to go down with increases in maximum capacity?
xxTIMURxx [149]

Answer: The answer is given below

Explanation:

Holding costs are the costs that.has to do with the storage of inventory that were not sold. costs and they are storage space, price of damaged or spoilt goods, labor, and insurance.

It should be noted that with regard to holding cost, increasing peak capacity will be expected to reduce since the capacity is typically inversely proportional to the theory of the holding cost as there may be a reduction in the holding cost so as to increase the capacity.

3 0
3 years ago
Among the tax proposals regularly considered by Congress is an additional tax on distilled liquors. The tax would not apply to b
Lelu [443]

Answer:

Liquor consumers

Explanation:

Price elasticity measures the degree of responsiveness of quantity demanded to changes in price. Demand is elastic if a small change in price has a great effect on quantity demanded. The coefficient of elasticity is usually greater than 1.

Demand is inelastic if changes in price has little or no impact on the quantity demanded. Coefficient of elasticity is usually less than 1.

The elasticity of demand for liquor is -0.4 while the elasticity of supply for liquor is 3.5. Therefore the demand for liquor is inelastic while the supply of liquor is elastic.

If taxes are imposed on consumers, the quantity demanded wouldn't change or change a little.

If taxes are imposed on suppliers, the quantity supplied would fall more.

Therefore , the burden of tax can be passed on more to consumers.

I hope my answer helps you.

3 0
3 years ago
Harvey Industries, a Wisconsin company, specializes in the assembly of high-pressure washer systems and in the sale of repair pa
noname [10]

Answer:

<em>1. Airplanes. </em>

<em>2. Ice-cream plants. </em>

<em>3. Building maintenance. </em>

<em>4. Engines. </em>

<em>5. Automobiles. </em>

<em>6. Barns.</em>

<em>7. Lift trucks. </em>

<em>8. Swimming pools.</em>

<em>9. Machinery. </em>

Explanation:

In this scenario, Harvey Industries, a Wisconsin company, specializes in the assembly of high-pressure washer systems and in the sale of repair parts for these systems. The products range from small portable high-pressure washers to large industrial installations for snow removal from vehicles stored outdoors during the winter months.

Basically, the high-pressure water cleaning is a process that involves using water running at a very high pressure and sometimes high temperature to remove mold, dirt, dusts, loose paint, snow removal, grime etc from physical objects such as vehicles, equipments, buildings, billboards through the use of a plunger pump.

The typical uses for high-pressure water cleaning include: Airplanes, Ice-cream plants, Building maintenance, Engines, Automobiles, Barns, Lift trucks, Swimming pools, Machinery etc.

The proper application of high-pressure water cleaning helps to reduce environmental degradation, ensure equipments or environment are clean and neat. Also, high and tight places that cannot be easily reached by humans can still be cleaned with the help of a high-pressure water cleaner.

3 0
3 years ago
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