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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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vodomira [7]
<h3>Answer: Neither. They will use International Law. </h3>

Explanation:

When companies from different countries get  into a contract, it is quite desirable that they stipulate which country's laws that they will abide by should the need arise.

However, if this is not done, there is still a method of enforcing. When not specifically listed, contract between companies from different countries falls under a branch of Private International law which is International Contract Law which is synonymous with International Sales law.

This law falls under the jurisdiction of the United Nations Convention on Contracts for the International Sale of Goods (CISG) which came into effect in January 1988.

Both France and the United States of America have ratified the law and so Cowboy Hats is free to take legal action within this framework if they so please.

7 0
3 years ago
What is the fundamental rethinking of business processes to bring about dramatic improvements in​ performance?
Tju [1.3M]

d. process redesign?

5 0
3 years ago
Business ethics: Results in a set of correct decisions made by a company Refers to a standard of business conduct Can improve bu
Firlakuza [10]

Answer:

The answer is: Refers to a standard of business conduct and can improve business decisions

Explanation:

Business ethics are the moral principles and values that guide how a company behaves. It´s a way for distinguishing if something is right or wrong.

Since any business is part of a community (or several communities in case of big corporations) its decisions are judged by the community. Customers don´t tolerate flagrant unethical business behavior, no matter what excuse.

Customers like businesses that show ethical values. That is why some corporations try to present themselves as ecological or caring about their community.  

7 0
3 years ago
Blue Ridge Bicycles uses a standard part in the manufacture of several of its bikes. The cost of producing 43,000 parts is $140,
kifflom [539]

Answer:

$71,000

Explanation:

The computation of operating income is shown below:-

Total costs if company bought = Cost of production × Outside supplier per unit) + (Fixed cost × Remaining percentage)

= (43,000 × $3.80) + ($68,000 × (100% - 30%))

= (43,000 × $3.80) + ($68,000 × 70%)

= $163,400 + $47,600

= $211,000

Loss in Income if part is bought = Total costs if company bought - Total costs originally

= $211,000 - $140,000

= $71,000

Therefore, Making profit will be more by $71,000 and for computing the Loss in Income if part is bought we simply applied the above formula.

8 0
3 years ago
Alain mire files a single tax return and has adjusted gross income of $304,000. his net investment income is $53,000. what is th
scoray [572]

Answer:

$2,014

Explanation:

Alain's net investment income tax is the lesser of 1) his net investment income ($53,000) or 2) his modified adjusted gross income less the threshold of $200,000 .

Therefore

$304,000 - $200,000 = $104,000

3.8%×$104,000= $3,952

($53,000 × 3.8% )= $2,014

The additional tax that alain will pay on his net investment income for the year is $2,014

4 0
3 years ago
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