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
miskamm [114]
3 years ago
7

Western Electric has 31,500 shares of common stock outstanding at a price per share of $78 and a rate of return of 13.05 percent

. The firm has 7,250 shares of 7.70 percent preferred stock outstanding at a price of $94.50 per share. The preferred stock has a par value of $100. The outstanding debt has a total face value of $401,000 and currently sells for 110.5 percent of face. The yield to maturity on the debt is 8.05 percent. What is the firm's weighted average cost of capital if the tax rate is 40 percent
Business
1 answer:
S_A_V [24]3 years ago
8 0

Answer:

WACC = 11.13%

Explanation:

total market value common stocks = 31,500 x $78 = $2,457,000

total market value of preferred stock = 7,250 x $94.50 = $685,125

total market value of debt = $401,000 x 1.105 = $443,105

total = $3,575,230

Rcs = 13.05%

Rps = $7.70 / $94.50 = 8.15%

Rd = 8.05%

WACC = ($2,457,000/$3,575,230 x 13.05%) + ($685,125/$3,575,230 x 8.15%) + ($443,105/$3,575,230 x 8.05% x 60%) = 8.968% + 1.562% + 0.6% = 11.13%

You might be interested in
When Penguin Catering Services first opened, the owner decided to target only events at resorts in its geographic region. Pengui
Juliette [100K]

Answer: Penguin Catering was using a Concentrated targeting strategy.

An organization that adopts a concentration strategy chooses to focus its marketing efforts on only one very defined and specific market segment. Accordingly, only one marketing mix is developed. For example, the manufacturer of Rolex watches has chosen to concentrate on the luxury segment of the watch market.

6 0
2 years ago
7) Which of the following is the best statement of performance feedback?
Gelneren [198K]

Answer:

"Your last report contained seven errors which I think you could improve."

Explanation:

Performance feedback is used to give an employee a specific feedback about his work. The statement is specific to the performance metric and provides quantitative information about work performed.

In this scenario the statement "Your last report contained seven errors which I think you could improve." Has a feedback about the employee report, the quantitative aspect states that there were 7 errors in the work.

3 0
3 years ago
Read 2 more answers
suppose a school needs to hire two new teachers but they are 20 recent college graduates hoping to get a teaching job at that sc
lozanna [386]

This is an example of supply and demand. The school is looking for two teachers to fill the open spots at their school; there is a demand of two new teachers. However, with the demand for two teachers comes a supply of 20 teachers that are able to take the spot. Supply and demand refers to the amount of something that is available and the desired need for it.

3 0
3 years ago
Read 2 more answers
Universal Bank pays 7% interest, compounded annually, on time deposits. Regional Bank pays 6% interest, compounded quarterly. Ba
Lady bird [3.3K]
Rate Assumptions: 500,000 Loan, 60% Loan-To-Value, Rate and Term Refinance, 740+ Credit Score, 180-month loan term, Rate Lock of 30 days. All closing costs are rounded to the nearest discount point. Request a quote to find out what you’re eligible for. We do not require a credit check for a written quote.
4 0
2 years ago
Two beer-brewing companies, Piwo and Olut, operate in a duopoly Initially, they achieve tacit collusion, charging beer prices in
Hitman42 [59]

Answer:

C. Price War

Explanation:

A price war is a situation that occurs between rival firms where one firm decides to reduce the price of its product in an attemp to gain a upper hand over its rival. The upper hand being targeted could be in form of capturing a greater market share, profitability or simply to push the rival out of the market.

In both situation both by Piwo and the response by Olut, the strategy is Price War. Piwo's new management's strategy to cut prices to gain larger market share and profit is a price war strategy. The response from Olut as well to cut its prices below margina costs to push Piwo out of business is also a Price War Strategy.

A cartel involves an agreement by a group of firms on market share as well as the price of products and every member is obliged to abide by this agreement while Price Leadership is a form of cooperation amongst firms, where a firm (the price leader) sets the price for the market and the rivals decides to follow the price set by the leader.

6 0
3 years ago
Other questions:
  • Harmony Company sells handminusknit scarves. Each scarf sells for $ 45. The company pays $ 70 to rent vending space for one day.
    11·1 answer
  • How is the work in process inventory account related to the finished goods inventory account?
    7·1 answer
  • The crusades sped up and significantly increased the breakdown of the:
    13·1 answer
  • If I loan you money for your business, what type of financing am I offering you? a. Equity Capital b. Equity Financing c. Annual
    10·2 answers
  • To be Lean means:
    15·1 answer
  • Which of the following statements is true about work hour regulations for 14 and 15-year-olds?
    6·1 answer
  • On April 15, 2012, Andy purchased some furniture and fixtures (7-year property) for $10,000 to be used in his business. He did n
    15·1 answer
  • The production department in a process manufacturing system completed 80,000 units of product and transferred them to finished g
    12·1 answer
  • Which of the following countries contributes the least amount of aid to foreign countries and multinational organizations based
    7·1 answer
  • Lower-level managers are empowered to make decisions in a ______ organization, which can ________ motivation and job satisfactio
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!