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Ipatiy [6.2K]
3 years ago
7

Mullineaux Corporation has a target capital structure of 65 percent common stock and 35 percent debt. Its cost of equity is 12.8

percent, and the cost of debt is 7.5 percent. The relevant tax rate is 23 percent. What is the company’s WACC? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Business
1 answer:
Zepler [3.9K]3 years ago
8 0

Answer:

WACC = 10.35%

Explanation:

The weighted Average cost of Capital is the average cost of capital for the different sources of long-term capital available to a firm weighted according to the proportion that each source of finance bears to the total capital in the pool..  

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

= (1-0.23)× 7.5% = 5.8%  

Type          Cost (%)       Weight         cost × weight

Equity          12.8              65%               8.32

Debt            5.8                 35%       <u>       2.03  </u>

Total                                                      10.3  

WACC = 10.35%

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The project is expected to generate the following net cash flows:
iVinArrow [24]

Answer:

Correct option is A 5.01%

Explanation:

Let irr be x%

At irr,present value of inflows=present value of outflows.

1,500,000=350,000/1.0x+475,000/1.0x^2+400,000/1.0x^3+475000/1.0x^4

Hence x=irr=5.01%(Approx).

8 0
2 years ago
Total variable costs A. always increase with output. B. initially decrease and then increase with output. C. initially increase
galina1969 [7]

Answer:

A. always increase with output.

Explanation:

There are basically 2 groups of cost namely; Fixed and variable cost.

The fixed cost are usually like sunk cost that will be incurred irrespective of how many units are produced.

Total variable costs refers to all elements of cost that vary proportionately with the level of activities or output. A good example is the direct material cost.

It is the total of the marginal cost over the units produced. The right answer is A. always increase with output.

6 0
3 years ago
When you gave your friend a fifty-dollar bill for an iPod, you used money as a
Sonbull [250]
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4 0
3 years ago
How should an organization think about cyber defense? What are the limits of a ‘perimeter-oriented’ security posture?
mina [271]

Answer:

In the explanation is a short point of view about the cyber defense and the perimeter oriented posture.

Explanation:

To begin with, the concept known as "Cibersecurity" refers to the process of protection of computer systems and everything related to them like softwares, hardwares or any electronic data that could be harmful and sensitive for the company. The reason why this type of practice has been rising up the last years is due to the fact that the "internet of things" has been growing up as well and everyday the companies need to protect their information more and more. Moreover, the "perimeter-oriented" security posture implicates the focus on the external networks as being bad and on the other side the internal networks as being good and stable. So the reason why the companies should consider the cyber defense important is because they need to protect all the information that could be use against them.

4 0
3 years ago
Etxuck327 Inc. sells a particular textbook for $39. Variable expenses are $28 per book. At the current volume of 49,000 books so
Westkost [7]

Answer:

539,000.00  

Explanation:

As per the contribution margin analysis concept, the break-even point is obtained by dividing fixed cost by contribution margin per unit.

For Etuck327,

The selling price is $39

Variable expense is $28

Break-even in units is 49,000 books.

Contribution margin per unit = selling price - variable costs

=$39- $28

=$11

if Break-even = fixed cost/ contribution margin per unit, then

49,000= fixed cost / 11

fixed costs = 11 x 49000

Fixed costs = 539,000.00    

                   

5 0
2 years ago
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