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xz_007 [3.2K]
3 years ago
11

Lippo In. reports the following capital structure on its balance sheet: Debt $ 20 m, Preferred stock $ 10 m, Common stock $ 20 m

The debt has 10 years to maturity, carries a coupon rate of 6%, and sells at 86.58% of face value. The preferred shares have a face value of $100 each and pay an annual dividend of $11. They sell at $105 each. There are 1 million shares of common stock with a market price of $30 each. The stock has a beta of 1.2. The risk-free rate is 5%. Assume that the risk premium on the market portfolio is 6%. The tax rate is 40%. (Assume that flotation costs are negligible and bond coupons are paid annually.)
a. What is the after-tax cost of debt, preferred stock and common stock?
b. What is the weighted average cost of capital for the firm, if the current capital structure based on market values is the optimal capital structure?
Business
1 answer:
wel3 years ago
3 0

Answer:

hfsukfsutsitsufsutsitsuts

Explanation:

yrautstis

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Assuming a current ratio of 1.00 and an acid test ratio of .75 how will the purcahse inventory with cash affect each ratio
MAVERICK [17]

The current ratio will remain the same as 1 only

The acid-test ratio will decrease.

  • The current ratio will stay the same because there won't be a change in current liabilities, and the change in current assets won't have any net consequences because the asset will grow due to an increase in inventory, but it will also decrease by the same amount due to a decrease in cash, so the current ratio will stay the same.
  • The acid-test ratio will decline since the numerator will shrink owing to a cash shortage, and the growth in inventory won't be taken into account because current assets aren't included in this ratio.

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8 0
1 year ago
Randy arrived at the hotel to find that, although he had a guaranteed reservation, the hotel had no rooms available. He became a
KatRina [158]

Answer:

And he has reasons to be angry. The hotels usually are part of a large chain that can provide service for costumers to be happy in the given case that something like what you described happens. The hotel is not taking into account the interest and concerns of it's costumer and that will greatly affect  the reputation the have.

Explanation:

When a company "Guarantee" a service or product is under the moral obligation to satisfy the costumer on the terms previously agreed on. Managers should be aware that failing to fix the problem will no doubt affect the perception of possible clients in the future.

5 0
3 years ago
Drawing on material in the chapter and your own research, prepare a paper describing your views on the major social and legal is
atroni [7]

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Explanation:

Taxes has grown much bigger for most online retailers, when the like of Amazon started selling products online they were not billed to pay tax, those taxed then where companies who had a building(structure) but now online stores are now subject to taxes.

Some of the tax are much that it affects sellers who are not able to break even and make profit, especially when they don't meet targets they've set for themselves.

7 0
3 years ago
A Whopper combo meal costs $3.00 and gives you an additional 15 units of utility; a meal at the Embassy Suites costs $29.00 and
Olenka [21]

Answer:

be indifferent between the two meals

Explanation:

Marginal utility is the additional satisfaction received from consuming an additional unit of a good or service. Marginal utility is the additional utility derived from consuming one more unit of a good. the consumption decision is to consume more units of a good that gives the higher utility per good.

Marginal utility per good = marginal utility / price of the good

Whopper combo meal = 15 / 3 = 5

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both meals have the same marginal utility of 5. She would be indifferent between consuming the two meals

8 0
3 years ago
A production function is a relationship between:____.a. inputs and profit. b. inputs and quantity of output. c. inputs and reven
Dahasolnce [82]

Answer:

b. inputs and quantity of output

Explanation:

A production function is a relationship between inputs and the quantity of output. In other words, it is the entire production process that goes into creating a product. This includes the specific materials that need to be inputted into the process in order for the output to be exactly as needed in order for the product to come out as desired and the right quantity. Thus, creating a relationship between input and output

4 0
3 years ago
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