1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Pani-rosa [81]
3 years ago
8

Being Human, Inc., recently issued new securities to finance a new TV show. The project cost $14.5 million, and the company paid

$775,000 in flotation costs. In addition, the equity issued had a flotation cost of 7.5 percent of the amount raised, whereas the debt issued had a flotation cost of 3.5 percent of the amount raised. If the company issued new securities in the same proportion as its target capital structure, what is the company’s target debt-equity ratio? (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., .1616.)
Business
1 answer:
Furkat [3]3 years ago
8 0

Answer: 1.54

Explanation:

Based on the information given in the question, the company’s target debt-equity ratio will be:

The total costs will be:

= $14.5 million + $775000

= $15.275 million

Since amount needed = amount raised × (1-fT)

Therefore, 15.275 × (1-f) = 14.5

15.275 - 15.275f = 14.5

f = floatation costs = 5.074%

Therefore, 5.074% × (1 + D/E) = 7.5% + (D/E) × 3.5%

Solving for debt-equity ratio, the value will be = 1.54

You might be interested in
Don works diligently to accomplish the company goals in an efficient and effective manner, utilizing his employees through plann
DanielleElmas [232]
<span>Don is a leader within the company that can be in charge of a group of people under his responsibility and direction. You can also be a supervisor and head of a division or department. He has enough qualities to play a leadership role, which is why he becomes a leader in the company with great positive and efficient aspects.</span>
6 0
4 years ago
Of the following tasks, which one is least likely to be part of an administrative professional job today ?
Bogdan [553]
You didn’t leave choices to pick from
7 0
3 years ago
A 16-year-old female applied for a conventional loan in order to purchase a condominium. The lender denied the application, citi
aksik [14]

Answer:

C.

Explanation:

The lender lawfully denied the application because the applicant was under 18 and therefore was too young to legally sign a contract.

A 16 year old is not up to the age to sign a contract and even at that Every lender has their own requirements for approving a loan. And for a person who is just 16 getting a loan approval is going to be near impossible except it is done with the cosignature of a parent. This is because several checks are usually done before a loan is approved and a 16 year old may not pass all of them.

7 0
3 years ago
Suppose that you are a student worker in the statistics department and they agree to pay you using the random pay system. Each w
artcher [175]

Answer:

The probability of getting paid more than $6500 in 100 weeks is 0.6%

Explanation:

In this problem, we need to define a probabilty distribution for the money earned.

The 100-week payoff can be expressed as

PO=40*L+80*H=40*(100-H)+80*H=4000+40H

Being L the numbers of weeks we have low pay and H the weeks we have high pay.

Now, as it is a coin flip, H is a binomial random variable with p=0.5 and n=100

For a total pay off of more than 6500, H has to be

6500=4000+40H\\\\H=2500/40=62.5

That means that in at least 63 of the 100 weeks we have to get a high pay.

P(H\geq 63)=1-\sum_{i=1}^{62} P(X_i)

If we compute the individual probabilities we get P(H≥63)=0.006 or 0.6%.

8 0
4 years ago
Arabian Beauty Cosmetics borrowed BD 152.300 from the National Bank of Bahrain (NBB) for three years. If the quoted rate (APR) i
Tju [1.3M]

Answer: 12.47%

Explanation:

First convert the APR to the relevant periodic rate.

The compounding is done daily so the periodic rate is:

= 11.75%/365

Effective Annual rate is calculated by the formula:

= ( 1 + periodic rate)  ^ compounding period per year - 1

= ( 1 + 11.75%/365)³⁶⁵ - 1

= 12.47%

5 0
3 years ago
Other questions:
  • What is the benefit of online banking?
    6·2 answers
  • What is the main difference between a personal characteristic and a skill ?
    6·2 answers
  • Honda Motor Company is considering offering a $ 1 comma 800 rebate on its​ minivan, lowering the​ vehicle's price from $ 30 comm
    14·1 answer
  • Bright Inc. is a toothpaste manufacturing company that is facing intense competition from its rivals. In order to encourage high
    14·1 answer
  • What can you most likely conclude about junk food?
    7·2 answers
  • In order to maximize net benefits, the managerial control variable should be used up to the point where:- marginal benefits equa
    8·1 answer
  • On January 1, Year 1. a company issues $100.000 of 8% bonds maturing in 10 years when the market rate of interest is 9%. The bon
    12·1 answer
  • Erin, the business administration department chair, observes a trend of increased enrollments in online college courses versus t
    9·1 answer
  • BuyCo, Inc., holds 25 percent of the outstanding shares of Marqueen Company and appropriately applies the equity method of accou
    5·1 answer
  • Marketing is the activities, sets of institutions, and processes that add ______ for customers.
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!