Answer:
C. 11.05%
Explanation:
The computation of the cost of capital under the proposed leveraging is shown below;
cost of capital is
=Debt÷ value of leverged firm × ((unlevered cost of capital × (1 - tax rate))
=800 ÷ 1600 × ((13% + (13%) × (1 - 30%)))
= 11.0500%
hence, the cost of capital is 11.05%
Answer:
<em>Gabrielle's economic decisions best relate to broad economic goals by still having a job during the evening and still pursuing on doing artistic projects..</em>
Answer: 7.46%
Explanation:
The CAPITAL ASSET PRICING MODEL is a very useful tool for calculating a firm's Cost of Equity.
The Formula is,
Rc = Rrf + b(Rpm)
Where,
Rc is the Cost of Equity
Rpf is the Risk risk free rate
b is beta
Rpm is the risk premium
Plugging in the digits we have,
Rc = 0.0350 + 0.88(0.045)
= 0.0746
The firm's cost of equity from retained earnings based on the CAPM is therefore 7.46%
Answer:
Check the explanation
Explanation:
Increase in value of dollar has made the foreign steel (a major commodity used in production) cheaper for American producers.
This will reduce the cost of production of American Producers and would increase their profit-margin.
This will induce US firms to produce more and therefore there will be increase in short-run aggregate supply.
So, the given scenario will involve short-run aggregate supply curve and would shift the curve to the right.
Kindly check the attached image below to see the required graph -
