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tia_tia [17]
3 years ago
15

A firm has an equity multiplier of 1.57, an unlevered cost of equity of 14 percent, a levered cost of equity of 15.6 percent, an

d a tax rate of 21 percent. What is the cost of debt
Business
1 answer:
Elanso [62]3 years ago
6 0

Answer:

10.45%

Explanation:

Calculation to determine the cost of debt

B/S = 1.57 − 1

B/S = .57

.156 = .14 + .57(1 −.21)(.14 − RB)

.156 = .14 + .57(.79)(.14 − RB)

RB = .1045*100

RB= 10.45%

Therefore the cost of debt is 10.45%

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Donald is given the assignment by his PR firm to prepare a news release designed to be distributed through online search engines
IrinaK [193]

Answer: The answer is Keywords.

Explanation: Keywords are the words and phrases in a particular website that make it possible for people to be able to find the website when using search engines.

For example, typing "interview questions" into a search engine will bring up a bunch of websites who have used the keywords "interview questions" in their website.

Therefore, in order for Donald in the scenario above to optimize search engine results, he should incorporate important keywords that pertain to the news release that are to be distributed.

5 0
3 years ago
A decreasing-cost industry is one in which: a. contraction of the industry will decrease unit costs. b. input prices fall or tec
Bas_tet [7]

Answer:

B

Explanation:

When we talk of a decreasing cost industry, we refer to an industry in which the expansion of the industry will lead to a decrease in the unit production cost.

So with respect to the question at hand , the correct answer is that the input prices will fall as industry expands

The case of a a technological improvement is expected to drive a decrease in the input prices for production in the expanding industry

8 0
3 years ago
Consider the market for plane tickets to Hawaii. A bad winter in the mainland United States increases demand for tropical vacati
gavmur [86]

Answer:

Increase

Explanation:

Consumer surplus means the difference between the highest price a consumer is willing to pay and the actual market price of a product

Producer surplus means the difference between the market price and the lowest price a producer is willing to take for his product.

The addition of the two gives total surplus which is also known as economic surplus.

In economics, market price and quantity of a good are obtained when supply and demand curves intersect. The space before the intersection of the two curves is where the consumer is ready to pay higher than the price which suppliers is ready to a given quantity the good. There is therefore surplus for both of them at the market price.

If the demand curve shifts to the right while the supply curve remains constant, the market price will rise and this will lead to increase both consumer and producer surplus increase. By implication, total surplus will rise since it is the addition of both consumer and producer surplus.

Therefore, total surplus will increase if a bad winter in the mainland United States increases demand for tropical vacations, which shifts the demand curve to the right while the supply curve stays constant.

I wish you the best.

5 0
3 years ago
You are hurt in a car accident and your lawyer wins a $100,000 settlement to be distributed as follows: $20,000 immediate paymen
Orlov [11]

Answer:

The value of the settlement is $ 62,604.06  

Explanation:

The value of the settlement is the present values of all cash flows less lawyer's fees of $10000

In discounting the cash flows, I used the Present Value formula,which is:

PV=FV/(1+r)^n

FV =future value,amount receivable at each point time

r=rate of return=6%

n is the applicable number of years to each future value amount, for instance the $30000 last payment is receivable in the eleventh year,hence n is 11 years

The settlement value is the figure in the excel spreadsheet attached.

Download xlsx
5 0
3 years ago
The major difference between the indirect and the direct method of a statement of cash flows appears in which the following acti
Ulleksa [173]

Answer: Option D

                                             

Explanation: In simple words, operating activities refers to the  activities that are related to the core operation of the business.

While preparing cash flow statement from the method, the accountant records the inflow and outflow of the activities directly, however, in case of applying the indirect method the accountant takes the accrual basis to cash basis accounting transactions into consideration.

While preparing cash flow statement other two sections are prepared in a same way in which all the inflows and outflows are recorded directly.

   Thus, from the above we can conclude that the correct option is D.

7 0
3 years ago
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