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labwork [276]
3 years ago
11

Compute the weight of common equity that should be used in the firm's WACC calculation if the market value of the firm's debt is

$62 million, the market value of the firm's preferred stock is $7 million and the market value of the firm's common equity is $111 million. Enter your answer as a decimal (i.e. 0.54)
Business
1 answer:
Orlov [11]3 years ago
5 0

Answer:

0.62 or 62 %

Explanation:

Weight of common equity = Market Value of Equity ÷ Total Market Value of Sources of Finance

where,

Market Value of Equity = $111 million

Total Market Value of Sources of Finance = $62 million + $7 million  + $111 million = $180 million

therefore,

Weight of common equity = $111 million ÷ $180 million

                                            = 0.62 or 62 %

Conclusion

the weight of common equity that should be 0.62 or 62 %

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A recent income statement of Suni Corporation reported the following data:
tamaranim1 [39]

Answer:

E. 12,500 units

Explanation:

Contribution margin = Sales - Variable cost = $6800000 - $2800000 = 40,00,000

Contribution margin per unit = 4000000/20000 = $200 per unit

Break-even Point = Fixed cost/Contribution margin per unit = $2500000/$200 = 12500 units

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3 years ago
Sommer, Inc., is considering a project that will result in initial aftertax cash savings of $1.79 million at the end of the firs
iren [92.7K]

Answer:

Maximum initial cost would be $58,116,883.12

Explanation:

1,790,000 increased at 3%

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Ke 0.119 + 0.02 = 0.139

ER 0.15

Kd(after-tax) Kd(1-t) = 0.047

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WACC = 0.139(0.15) + 0.047(.85)

WACC 0.06080

Now that we have the rate, we calculate the present value using the gordon method

1,790,000 / (0.06080-0.03) = 58,116,883.12

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3 years ago
Select the correct answer from each drop-down menu.
Aleks [24]

Answer:

As Fabian opened his store and made a purchase in credit, this made the asset as current assets and they are mainly getting converted to current liabilities as because he is liable to pay for the products he purchased but was unable to sell those items.

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What should be included in an outline for an informative essay? Check all that apply.
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(1) a thesis statement & (3) several subtopics
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The correct answer is (B)

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