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ehidna [41]
3 years ago
7

A firm's cost of equity is 22%. Its before-tax cost of debt is 13% and its marginal tax rate is 21%. The firm's capital structur

e calls for a debt-to-equity ratio of 45%. Calculate the firm's cost of capital
Business
1 answer:
alisha [4.7K]3 years ago
4 0

Answer:

WACC= 17.95%

Explanation:

Weighted average cost of capital is the average cost of all of the long-term types of finance used by a company weighted according to the that amount of finance used in relation to the total pool of fund.

It is calculated using the formula below:

WACC = (We×Ke)  +  (Wd×Kd)

Ke-cost of equity- 22%

We- equity weight- 100% - 45% = 55%

Kd-After tax cost of debt-10.3%

Wd- 45%

After tax cost of debt = Before tax ×× (1- tax rate)

After tax cost of debt = 13%× (1-0.21) = 10.3%

Cost of equity = 22%

WACC =(0.55× 22%) + (0.45× 13%)=17.95%

WACC= 17.95%

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telo118 [61]

Answer:

$22,800

Explanation:

Calculation for the total amount of indirect manufacturing cost incurred

First step is to find the fixed manufacturing overhead portion

Fixed manufacturing overhead portion=$3.00 *5000 units

Fixed manufacturing overhead portion =$15,000

Second step is to calculate the indirect manufacturing cost if 6,000 units are produced using this formula

Indirect manufacturing cost =Fixed manufacturing overhead portion

+ Variable portion

Let plug in the formula

Indirect manufacturing cost=$15,000 + ($1.30*6,000 units)

Indirect manufacturing cost=$15,000+$7,800

Indirect manufacturing cost=$22,800

Therefore the total amount of indirect manufacturing cost incurred is closest to $22,800

8 0
3 years ago
Bravo Industries intends to retire $950,000 in short-term debt using proceeds from the sale of 30,000 shares of common stock. Th
harina [27]

Answer:

the amount that should be excluded from the current liabilities is $750,000

Explanation:

The computation of the amount that should be excluded from the current liabilities is shown below;

= Number of shares in the common stock × selling price per share

= 30,000 shares × $25

= $750,000

Hence, the amount that should be excluded from the current liabilities is $750,000

7 0
3 years ago
Jason rents rooms in his hotel for an average of $100 per night. The variable cost per rented room is $20. His fixed costs are $
melisa1 [442]

Answer:

D) 1,500

Explanation:

rent per room =$100 dollars

variable cost= $ 20 dollars

fixed cost =$ 100,000.00

desired profits=$ 20,000.00

volume(V) to meet profit target;

Contribution margin per sale= $100-$20= $80

Profits = revenue-cost

=$20,000= Vx$80-$100,000

=20,000=v80-100000

   v80=100,000.00+20,000

    v80=120,000

         v=  120,000/80

Volume =1,500

 

8 0
3 years ago
Charlie Company uses a perpetual inventory system. During May, the following transactions and events occurred.
satela [25.4K]

The May transactions for Charlie Company (seller) assuming that Charlie uses a perpetual inventory system are:

Charlie Company Journal entries

May 13

Debit Account receivable $360

(8×$45)

Credit Sales $360

(To record credit sales)

May 13

Debit Cost of goods sold $208

(8×$26)

Credit Merchandise inventory $208

(To record cost of goods sold)

May 16

Debit Sales return and allowances $45

Credit Account receivable $45

(To record goods returned)

May 16

Debit Merchandise inventory $26

Credit Cost of goods sold $26

(To record cost of goods sold returned)

May 23

Debit Cash $302

($315-$13)

Debit Sales discount $13

(4%×$315)

Credit Account receivable $315

($360-$45)

Learn more here:

brainly.com/question/16912611

3 0
3 years ago
If you noticed that one of your co-workers was stealing a very small amount of cash from the cash register each day, how would y
Damm [24]

Noticing a cash embezzlement done by any colleague in work area then a personal ethics tend to be involved is loyal reporting to employer with quickly and decisively response.

<h3>What are Personal Ethics at work place?</h3>

Personal ethics refers to a person's moral principles and directs individuals in their decisions both inside and outside of the workplace.

Specific moral values will impact a person on how he/she will respond to a particular situations at work and how deal with it while advancing career.

Thus if a person find his or her colleague doing cash register manipulation contact immediately the team leader or any superior for the benefit of company.

To know more about Personal Ethics at work place refer:

brainly.com/question/1031443

#SPJ1

7 0
1 year ago
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