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Sergio [31]
3 years ago
14

Take It All Away has a cost of equity of 10.54 percent, a pretax cost of debt of 5.27 percent, and a tax rate of 35 percent. The

company's capital structure consists of 68 percent debt on a book value basis, but debt is 28 percent of the company's value on a market value basis. What is the company's WACC?
Business
1 answer:
bogdanovich [222]3 years ago
6 0

Answer:

9%

Explanation:

WACC is the average cost of capital of the firm based on the weightage of the debt and weightage of the equity multiplied to their respective costs.

According to WACC formula

WACC = ( Cost of common stock x Weightage of common stock ) + ( Cost of preferred stock x Weightage of preferred stock ) + ( Cost of debt ( 1- t) x Weightage of debt )

As WACC is calculated using Market values.

Company Value = 100%

Value of Debt = 28%

Value of Debt = 100% - 28% = 72%

WACC = ( 10.54% x 72% ) + ( 5.27% x 28% )

WACC = 7.59% + 1.48%  = 9.07% = 9% (rounded off)

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You are looking at three different job options, one in Pennsylvania, one in Texas, and one in New York. The offers are as follow
tamaranim1 [39]

Answer:

Texas will be a better option as the net pay after income tax is higher than the other cities.

Explanation:

To consider the after-tax wages we must subtract the income taxes from the salaries:

Pennsylvania after tax income: 62,000 x (1-3.07%) = 60,096.6

Texas after tax income:                                                 64,000

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5 0
2 years ago
A list of financial statement items for Blossom Company includes the following:
cricket20 [7]

Answer:

Total current assets            $83,580

Explanation:

The preparation of the current assets section of the balance sheet is shown below:

<u>Current Assets                  Amounts </u>

Cash                                   $22,360

Debt investments(short term) $17,360

Accounts receivables     $30,100

Supplies                             $8,170

Prepaid Insurance              $5,590

Total current assets            $83,580

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Sunland Company gathered the following reconciling information in preparing its July bank reconciliation:
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Answer:

the adjusted cash balance per book is $25,390

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The computation of the adjusted cash balance per book is shown below

= Cash balance per books + Notes receivable and interest collected by the bank - Bank charge for check printing - NSF check

= $21,600 + $4,440 - $70 - $580

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Hence, the adjusted cash balance per book is $25,390

We simply applied the above formula so that the correct value could come

And, the same is to be considered

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Auditors-Are-Us LLC, audited the financial statements of LINKCO Industries, a private company, for the year ended December 31, 2
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