Answer:
Cost of capital=11.18%
Explanation:
First We will calculate the Equity of firm:
Equity= Number of share* Book value per share
Equity= 10,000* $25
Equity= $250,000
Long-term debt=$300,000
Expected rate of return=15%=0.15
Current yield to maturity (rdebt)=8%=0.08.
Value of firm=Equity+Long-term debt
Value of firm= $250,000+$300,000
Value of firm= $550,000
Formula:
Cost of capital=11.18%
Answer:
coupon rate= 13.5%
Explanation:
Giving the following information:
Number of periods= 5*2= 10 semesters
Par value= $1,000
YTM= 0.1/2 = 0.05
Price bond= $1,136
<u>To calculate the coupon rate, first, we need to determine the coupon per semester using the following formula:</u>
Bond Price= coupon*{[1 - (1+i)^-n] / i} + [face value/(1+i)^n]
1,136 = coupon*{[1 - (1.05^-10)] / 0.05} + [1,000/(1.05^10)]
1,136 = coupon*7.722 + 613.91
522.09 = coupon*7.722
$67.61=coupon
<u>Now, the coupon rate:</u>
Coupon= par value*(coupon rate/2)
67.61= 1,000*(coupon rate/2)
67.61= 500coupon rate
0.135=coupon rate
coupon rate= 13.5%
Answer:
$38,675
Explanation:
sales price per pillow $97.50
total production 2,000 units
total sales 1,750 units
costs:
variable costs $22.10 per unit
fixed manufacturing $13.00 per unit
fixed administrative expenses $19.50 per unit
variable costing assigns only variable costs to inventory and COGS, so the COGS using variable costing = 1,750 units x $22.10 = $38,675
under variable costing, all fixed costs are period costs (fixed manufacturing and fixed administrative).
Answer:
<u>When making an outline, it is a good practice to:</u>
- Put the main idea in the title
- Have one main topic that does not relate to the title
- Strive for 3-5 major components
- Move single sub point to larger groups
- Allow sub points to overlap.
- Combine sub points whenever possible
