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Whitepunk [10]
3 years ago
10

Your firm uses half debt and half equity. The shareholders need to earn 20%. The firm can borrow at 5%. The risk free rate is 2%

. The tax rate is 40%. Find the weighted average cost of capital.
Business
1 answer:
IgorLugansk [536]3 years ago
7 0

Answer:

11.5%

Explanation:

WACC = weight of equity x cost of equity + weight of debt x cost of debt x (1 - tax rate)

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Does visa debit card consider a credit card? (bank of america?
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I don't think so cause they are both different companies.  <span />
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Suppose that the inflation rate is 2% and the real terminal value of an investment is expected to be $82,500 in 4 years. Calcula
Assoli18 [71]

Answer:

The answer is option (c)$89,301

Explanation:

Solution

Given that:

Inflation rate = 2%

The expected value of an investment = 82,500

Now,

nominal terminal value of the investment at the end of year 4.

Thus,

The nominal terminal value rate at the end of year four is given as follows:

= 82, 500 * (1 +2%) ^4

=$89300. 65

= $89,301

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3 years ago
As little as _______ percent of privately owned businesses ever move from the start-up stage to the success stage.
melomori [17]
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8 0
2 years ago
Read 2 more answers
If total revenue goes up when the price falls, demand is said to: be price unit-elastic. have positive price elasticity. be pric
Sholpan [36]
The answer to this item is letter <em>C. PRICE ELASTIC. </em>

The price elastic demand as stated in this given corresponds to the increase or rise in the total revenue when the price is brought down or decreased. This is indicated by the PED (price elasticity of demand).

The total revenue is calculated by multiplying the total items, good, or services sold by the unit price. For the demand which is price elastic, the decrease in the price will cause a higher raise in the number of customer vying for the products and services. 
7 0
3 years ago
According to the midpoint method, the price elasticity of demand between points A and B is approximately (0, 0.6, 1.67, 22.5) .
kvv77 [185]

Because the demand between points A and B is inelastic, a $25-per-bike increase in price will lead to an increase, in total revenue per day.

in order for a price decrease to cause a decrease in total revenue, demand must be inelastic.

<h3>What is the price elasticity of demand? </h3>

Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.

When the coefficient of elasticity is less than one, it means that demand is inelastic. When demand is inelastic, it means that the quantity demanded is not sensitive to changes in price.

Price elasticity of demand = midpoint change in quantity demanded / midpoint change in price  

Midpoint change in quantity demanded = change in quantity demanded / average of both demands

  • change in quantity demanded = 40 - 35 = 5
  • Average of both demands = (40 + 35) / 2 = 37.50
  • Midpoint change in quantity demanded = 5 / 37.50 = 0.133

Midpoint change in price = change in price / average of both price

  • Change in price = 100 - 125 = -25
  • Average of both prices = (100 + 125) / 2 = 112.50
  • Midpoint change in price = -25 / 112,50 = -0,222

Midpoint elasticity of demand =  0.133 /  -0,222 = 0.6

To learn more about price elasticity of demand, please check: brainly.com/question/18850846

7 0
2 years ago
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