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dexar [7]
3 years ago
8

A firm has a beta of 1.3 and a debt-to-equity ratio of .4. The market rate of return is 11.6

Mathematics
1 answer:
Citrus2011 [14]3 years ago
6 0

Beta= 1.3

Debt to equity ratio= 0.4

Market rate of return= 11.6%

= 11.6/100

= 0.116

Tax rate= 32%

= 32/100

= 0.32

Risk free rate=  3.3%

= 3.3/100

= 0.033

Pretax cost of debt= 7.2%

= 7.2/100

= 0.072

The firm's WACC can be calacluated as follows

RS= 0.033+1.3(0.116-0.033)

= 0.033+1.3(0.083)

= 0.033+0.1079

= 0.1409

WACC= (1/1.4)(0.1409)+(2/1.4) (0.072)(1-0.32)

= (0.7142)(0.1409) + (1.4285)(0.072)(0.68)

= 0.1006+0.0699

= 0.1705(100)

= 17.05%

Hence the firm's WACC is 17.05%

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What is the equation of the line that passes through (4, 2) and is parallel to 3x - 2y = -6?
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Answer:

Unfortunately I can't read your answer options properly. The copied text is just too messed up. But hopefully the step-by-step calculation will help you.

Lemme know if it worked for you and if you have further questions.

Step-by-step explanation:

3x - 2y = -6

can be rewritten as

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or simpler

y = 1.5x + 3

we know that it's parallel to this line, but we don't know how much lower or higher the new line will be, so let's set "+3" as an unknown variable.

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(the letter b is now what we try to solve for)

now let's plug in the x-/y-Informations of the given point

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so the new line is

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let's multiply everything by two to get closer to the original format

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it could also be expressed as

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(in hope that this may help for choosing an answer option)

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4 0
3 years ago
The answer choices are 32, 12, 18, 24 please help i cant fail this test
Ivan
It’s 32 because 4/5ths of 40 is 32
4 0
3 years ago
Read 2 more answers
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