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77julia77 [94]
3 years ago
12

JKL has 3 million shares of common stock outstanding and 80,000 bonds outstanding. The bonds pay semi-annual coupons at an annua

l rate of 9.05%, have 6 years to maturity and a face value of $1,000 each. The common stock currently sells for $30 a share and has a beta of 1. The bonds sell for 94% of face value and have a 10.42% yield to maturity. The market risk premium is 5.5%, T-bills are yielding 5% and the tax rate is 30%. What is the firm's capital structure weight for equity
Business
1 answer:
mylen [45]3 years ago
8 0

Answer:

54.48%

Explanation:

The computation of the weight of equity is given below;

But before that we need to do the following calculations

Total Equity

= 3 million shares × $30

= $90 million

The Value of Debt,

Total Debt = 80,000 (1,000)(0.94)

= $75.2 million

Now the weight of equity is

= $90 million ÷ ($90 million + $75.2 million)

= 54.48%

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Banks that have national charters must join the Federal Reserve and are subjected to its
aleksandrvk [35]

Answer: True

Explanation:

The Federal Reserve requires that all banks with National charters become members of the Federal Reserve so that they may have a say in the way the Fed runs its operations. State banks are not required to join but can if they meet some requirements.

The Office of Comptroller of the Currency (OCC) continually supervises and examines national banks to ensure that they are engaged in best practices regarding their operations and treatment of customers.

8 0
3 years ago
Which of the following is the best way to learn about a company culture?
WARRIOR [948]

Answer:

a on e2020

Explanation:

go it right on the test

3 0
3 years ago
those people who own the mode of production are typically of than laborers. group of answer choices a lower class the same class
hoa [83]

Those people who own the mode of production are typically of higher class than laborers.

In the Marxist theory of historical materialism, a mode of production refers to a specific combination of the productive forces, which tend to  include the human labour power, and another one is the social and technical relations of production.

So, here Marx says that a person's productive ability and his participation in  the social relations are known to be the two essential characteristics of social reproduction. Thus, those people who tend to own the mode of production are typically of the higher class than the laborers.

Hence, option C is correct.

To learn more about the mode of production here:

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3 0
1 year ago
If an investor's holding period is longer than the term to maturity of a bond, he or she is exposed to___________ A) interest-ra
Zigmanuir [339]

Answer:              

option B

Explanation:

Reinvestment risk refers to the possibility that potential cash flow will have to be invested in low-yielding assets, like coupons (the annual interest charges on the bond) or the eventual returns of the investment.

Reinvestment risk refers to one of financial risk's primary styles. The term is used to describe the threat of anyone canceling or stopping a particular investment, which one might need to find another place to reinvest the cash with the risk of not getting an equally attractive prospect.

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

7 0
3 years ago
Data below for the year ended December 31, 2021, relates to Houdini Inc. Houdini started business January 1, 2021, and uses the
katrin [286]

Answer:

70.3%

Explanation:

Current period cost-to-retail percentage is:

  • Beginning inventory  $70,000     $107,000
  • Plus: Net Purchases  $302,290  $450,000
  • Plus: Net markups                         $23,000
  • Less: Net markdowns                   ($43,000)

Goods available for sale (excluding beginning inv.) $302,290   $430,000

Goods available for sale (including beginning inv.)  $372,290   $537,000

Cost-to-retail percentage = $302,290 / $430,000 = 70.3%

5 0
3 years ago
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