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vivado [14]
4 years ago
10

Western Electric has 35,000 ordinary shares outstanding at a price per share of $47 and a rate of return of 13.5%. The firm has

5,000 preference shares paying 7% dividend outstanding at a price of $58 a share. The preferred share has a par value of $100. The outstanding bond has a total face value of $450,000 and currently sells for 102% of face. The pre-tax yield-to-maturity on the bond is 8.49%.
Business
1 answer:
DiKsa [7]4 years ago
7 0

Answer:

Explanation:

Question A) to C):

Calculation of Total Market Value, Capital Structure and WACC:

Excel Spreadsheet:

Finance homework question answer, step 1, image 1

Excel Workings:

Finance homework question answer, step 1, image 2

Answers:

The total market value is $2,394,000.

The capital structure weight of debt is 19.173%, preferred stock is 12.114% and common stock is 68.713%.

The WACC is 11.88%.

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Your financial planner offers you two different investment plans. Plan X is a $14,000 annual perpetuity. Plan Y is an annuity la
Sonbull [250]

Answer:

At 9.70% discount rate would you be indifferent between these two plans.

Explanation:

Present Value of Perpetuity = P/r

Present Value of Annuity = P/r[1 - (1 + r)^-n]

$14,000/r = $20,000. /r[1 - (1 + r)^-13]

(1 + r)^-13 = 1 - $14,000/$20,000.

(1 + r)^13 = 10/3

r = 9.70%

Therefore, at 9.70% discount rate would you be indifferent between these two plans.

7 0
3 years ago
United Technologies is a good example of a​ ________ strategy because it uses individual or separate family brand​ names, includ
Andrew [12]

Answer:

e. house of brands

Explanation:

House of brands is when a company has many brands. Each one is independent, with its own target audience. They each communicate a unique brand value to customers.

United Technologies has adopted this strategy by developing various brands: Otis Elevators, Carrier Heaters and Air-conditioners, Sundstrand Aerospace, and Sikorsky Helicopters.

8 0
3 years ago
The risk-free rate is 2.3 percent and the market expected return is 12 percent. What is the expected return of a stock that has
andrew-mc [135]

Answer:

The expected return = 10.739.

Explanation:

Given risk-free rate of return = 2.3 per cent

Market expected return = 12 percent  

The value of beta = 0.87

Use the below formula to find the expected return.

The expected return = Risk free rate of return + Beta × (Market expected return - risk free rate of return)

The expected return = 2.3 + 0.87 (12 – 2.3)

The expected return = 10.739

7 0
3 years ago
_____ in the emails serve the same role that headlines do in newspapers and magazines.
Anastaziya [24]

Subject lines in the emails serve the same role that headlines do in newspapers and magazines.

Subject lines are the short and single line sentence or phrase seen as the title of an email when received. They do the same purpose as that of the headlines of a newspaper. Newspaper headlines provide a brief idea of the news below it. It is also made attractive. The same goes with the subject line of an email. It needs to be catchy as well as compact. It gives the overall idea of the content of the email to the receiver.

Learn more about emails at brainly.com/question/16936700

#SPJ4

5 0
2 years ago
Question 5 of 10
LekaFEV [45]
C you’re taking a class to show you want to have more skill
7 0
3 years ago
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