Answer:
cost of equity is 11.60 %
Explanation:
Given data
cost of capital = 10.9 percent
tax rate = 35 percent
earnings = $21,800
bonds outstanding = $25,000
rate = 6 %
to find out
cost of equity
solution
we will find first value of unlevered
value of unlevered = earning ( 1 - tax rate ) / cost of capital
value of unlevered = 21800 ( 1 - 0.35 ) / 0.109 = $130000
so
value of unlevered will be for firm = 130000 × bond outstanding × tax rate
value of unlevered will be for firm = 130000 × 25000 × 35%
value of unlevered will be for firm = $138750
so value of firm will be = bond outstanding + equity
so equity will be = 138750 - 25000
equity = $113750
so now
cost of equity will be = cost of capital + ( cost of capital - rate) (bonds / equity ) ( 1 - tax rate )
cost of equity will be = 10.9%+ ( 10.9 % - 6%) (25000 / 113750 ) ( 1-0.35)
so cost of equity = 11.60 %
<span>When it comes to saving money, what is a good rule of thumb?
</span>B.Put aside money for savings each month
Good luck! :)
Once your compensation is established it is difficult to have significant increases without a promotion. Salary establishes other benefits amounts as well, such as retirement contributions, bonuses etc.
The METRIC of a type of measurments indicates how free that measurment is from random error is the answer although i can be wrong.
Explanation: It depends. If the employee can still perform the essential functions of the "street job" with or without reasonable accommodation, and without being a direct threat to health or safety, he or she cannot be forced into a light duty position because of a disability.
