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3 years ago

Merits of itinerant traders

Business

1 answer:

frutty [35]3 years ago

6 0

Answer:

Explanation:

1. Less capital: itinerant retailers have to move from one place to another , so they don't have to invest huge capital. For example: hawkers and paddlers have to buy just a hawker and some amount of goods which they can carry.

2. Services to doorsteps: these retailers provides their goods and services at the doors of the customers. For example: a vegetable seller sells vegetables at the doors of the customers .

3. Elasticity: the goods they sells are usually perishable in nature and whose substitutes are available in abundance. Therefore, these goods are highly elastic .

4. Economy: the goods which itinerants sells are economically cheaper, which even a low class of society can buy. For example: non-branded goods.

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Barton Industries expects that its target capital structure for raising funds in the future for its capital budget will consist

iris [78.8K]

Answer:

a. With New Stock = 8.307%

b. With Old stock = 7.971%

Explanation:

The weighted average cost of capital (WACC) defines the cost rate that blends the capital structure cost including equity, debt, and preferred stock.

Requirement A

If it uses retained earnings as its source of common equity,

Given,

The weight of the combination of the capital structure is -

$W_{d}$ = 40% = 0.40; $W_{p}$ = 5% = 0.05; $W_{e}$ = 55% = 0.55

For cost of debt, we have to find cost of debt after tax, $R_{d}(1 - t)$ =

6.9% x (1 - 0.40) = 4.14%

Cost of preferred stock, $R_{p}$ = 6.4%

Cost of new Equity, $R_{e}$ = 11.51%

We know, the weighted average cost of capital (WACC) =

$W_{d}$ x $R_{d}$ + $W_{p}$ x $R_{p}$ + $W_{e}$ x $R_{e}$

= (0.40 x 4.14%) + (0.05 x 6.4%) + (0.55 x 11.51%)

= 1.656% + 0.32% + 6.3305%

= 8.307%

Requirement B

If it has to issue new common stock, the weighted average cost of capital (WACC) = $W_{d}$ x $R_{d}$ + $W_{p}$ x $R_{p}$ + $W_{s}$ x $R_{s}$

Given,

The weight of the combination of the capital structure is -

$W_{d}$ = 40% = 0.40; $W_{p}$ = 5% = 0.05; $W_{e}$ = 55% = 0.55

For cost of debt, we have to find cost of debt after tax, $R_{d}(1 - t)$ =

6.9% x (1 - 0.40) = 4.14%

Cost of preferred stock, $R_{p}$ = 6.4%

Cost of new Equity, $R_{s}$ = 10.9%

Therefore, putting the value in the equation,

WACC = (0.40 x 4.14%) + (0.05 x 6.4%) + (0.55 x 10.9%)

WACC = 1.656% + 0.32% + 5.995%

WACC = 7.971%

4 0

3 years ago

What entry would blue make to record the sale of the machine for $30,250 cash?

nirvana33 [79]

An increase in cash would definitely placed in debit because it considered an asset and we need to place the increase of sales on the credit side.
So, in this case, the entry would be

Cash $ 30,250
Sales $ 30.250

6 0

3 years ago

Which of the following statements is correct with respect to economic incentives to release financial information?

makvit [3.9K]

Answer:

Explanation:

If investors do not have adequate information about the company they are investing, they would demand an higher rate of return. This would increase the cost of raising capital. So, financial managers who want to raise capital at a cheap rate would have the incentive to disclose information

8 0

2 years ago

An effective minimum wagea. imposes a price ceiling on the wages of various categories of low-skill workers.b. increases the dem

Strike441 [17]

Answer:

d. increases the earnings of some low-skill workers while reducing the employment and training opportunities available to others.

Explanation:

Minimum wage is a form of price floor. It is the lowest amount that should be paid to labour for their services rendered. It is usually set by the government or an agency of government.

Minimum wage causes supply of Labour to exceed demand for Labour. Firms would demand less of Labour because of higher cost of Labour. Decreased demand for Labour would increase unemployment.

Minimum wage isn't a price ceiling but a price floor.

Minimum wage increases the income of Labour.

5 0

3 years ago

A sponsor proposes research to evaluate reengineering a commercially available pacemaker. It is hoped that the new pacemaker wil

Darya [45]

Answer:True

Explanation:

A significant risk device presents a potential for serious risk to the health, safety, or welfare of a subject.

It is classified as Significant risk device since it hopes that the new pacemaker will pose fewer risks to individuals when compared to the current commercially available product.

4 0

2 years ago

Merits of itinerant traders​

Merits of itinerant traders