Answer:
What to produce?
Explanation:
A society has to make choices in order to meet the diverse needs of its members. The resources available in all economies are insufficient to meet all needs. Because of this scarcity, a society has to make informed decisions on what to produce at any given.
Societies make choices on what to produce with the available resource. In every decision, there is a sacrifice to be made.
1 in 5 of the sample employees use direct deposit
Answer:
WACC is 9%
Explanation:
WACC is the average cost of capital of the firm based on the weightage of the debt and weightage of the equity multiplied to their respective costs.
According to WACC formula
WACC = ( Cost of equity x Weightage of equity ) + ( Cost of debt ( 1- t) x Weightage of debt ) + ( Cost of Preferred equity x Weightage of Preferred equity )
As per given data
Market Values
Equity = $7 billion,
Preferred stock = $2 billion
Debt = $13 billion
Cost
Equity
Capital asset pricing model measure the expected return on an asset or investment. it is considered as the cost of common stock.
Formula for CAPM
Cost of Equity = Risk free rate + beta ( market return - risk free rate )
Cost of Equity = Rf + β ( Mrp )
Cost of Equity = 3% + 1.6 ( 8% ) = 15.8%
Preferred stock = $2 / $26 = 0.077 = 7.7%
Debt = 8%
Placing values in the formula
WACC = ( 15.8% x $7 billion / $22 billion ) + ( 8% ( 1- 0.3) x $13 billion / $22 billion ) + ( 7.7% x $2 billion / $22 billion )
WACC = 5.03% + 3.31% + 0.7% = 9.04%
