1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
lyudmila [28]
2 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]2 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%

You might be interested in
Allocative efficiency occurs when the a. minimum of average total cost equals average revenueb. minimum of average total cost eq
Usimov [2.4K]

Answer: Allocative efficiency occurs when the<u><em> marginal cost equals the marginal benefit to society</em></u>

Allocative efficiency is a state of the economy in which production stand for individual preferences, every commodity or work is produced up to the state where the last part renders a marginal benefit to individual equal to the marginal cost of producing.

<u><em>Therefore the correct option is (c)</em></u>

3 0
3 years ago
.According to supply-side fiscal policy, reducing tax rates on wages and profits will:
sergejj [24]

Answer:

The answer is C.

Explanation:

Reducing tax rate according to supply - side policy creates demand pull inflation.

Demand pull inflation is a situation whereby people have more buying power due to the availability of cash thereby leading to high demand and consequentially leading to an increase in the price of goods and services by suppliers.

That is the process where demand outplays supply due  to the high purchasing power thereby causing price to increase which is the demand pull inflation effect.

6 0
2 years ago
In order to be impartial and lawful, a pre- inspection agreement must be
lakkis [162]
A. paid for by the lender. 
<span>B. signed by the real estate agent. </span>
<span>C. used within 30 days </span>
<span>D. negotiable and capable of being altered. </span>

<span>The Standards of Practice published by the American Society of Home Inspectors (ASHI) are quite inclusive and </span>
<span>A. describe the procedures used in a termite inspection. </span>
<span>B. explain that inspectors may never examine heating systems. </span>
<span>C. can be referred to in court, if necessary. </span>
<span>D. list the fees inspectors must charge for their services </span>
<span>(I know for this question it is NOT D.) </span>

<span>Another term for a pre-inspection agreement is </span>
<span>A. standard of practice </span>
<span>B. pre-sale inspection. </span>
<span>C. scope of work. </span>
<span>D. partial inspection. 
hope that helped</span>
8 0
2 years ago
Read 2 more answers
The primary goal of the federal reserve system is to/12562961/289d096f?utm_source=registration
Finger [1]
The Federal Reserve System<span> often referred to as the </span>Federal Reserve<span> or simply the </span>Fed<span> is the central </span>bank<span> of the United States. It was created by the Congress to provide the nation with a safer, more flexible, and more stable monetary and financial </span>system<span>.</span>
3 0
3 years ago
An insurance company chartered in another country has been licensed to operate in your state. In your state the insurance compan
vladimir2022 [97]

When an insurance company chartered in another country has been licensed to operate in your state. In your state, the insurance company is called a foreign insurer.

<h3>What is insurance?</h3>

Insurance refers a policy or agreement which provides financial protection to any individual if he faced any injury or died in accident.In case of injury,it helps in receiving medical claim as per the policies of the insurance company.

A foreign insurer is a corporation based in one state that writes insurance for clients in those other states. In the world of health insurance, foreign insurers are fairly common.

The benfits of these policy is that it offers better benefits in  terms and protection to the policy holders as compared to own state.In this insurance the more options are received which is not available in own state.

Learn more about Insurance, here:

brainly.com/question/27822778

#SPJ1

8 0
2 years ago
Other questions:
  • The following items were selected from among the transactions completed by O’Donnel Co. during the current year:
    8·1 answer
  • According to goal setting theory, an employer can increase employees’ motivation to reach goals by _____
    5·1 answer
  • Black Cat Corporation manufactures a product with the following full unit costs at a volume of 4,000 units: Direct materials $20
    11·1 answer
  • In mutual v. ohio, the supreme court ruled that motion pictures were _____. inherently detrimental to society a business a form
    9·1 answer
  • The fact that a family would spend a lot more time researching the market before buying a new car than it would in the decision
    10·1 answer
  • Currency should have all the following characteristics EXCEPT:
    7·1 answer
  • Please help me with personal finance!!! NO LINKS!!!
    9·1 answer
  • _____ are stories about a person’s life written by that individual.
    12·2 answers
  • Question 1 (1 point) One of the ways rent control is inefficient is that it leads to: a markets that maximize total surplus. b h
    12·1 answer
  • What entrepreneurship activities could you engage in that
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!