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miss Akunina [59]
2 years ago
9

WHAT DO YOU MEAN BY MARKET DEVELOPMENT ? EXPLAIN.​

Business
1 answer:
NemiM [27]2 years ago
5 0

Answer:

market development is a strategic step taken by a company to develop the existing market rather than looking for new market .The company looks for a new buyers to pitch the product to a different segment of consumers in an effort to increase sales.

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A firm wants to create a WACC of 11.2 percent. The firm's cost of equity is 16.8 percent and its pretax cost of debt is 8.7 perc
Andre45 [30]

Answer:

Debt equity ratio = 1.01

Explanation:

given data

WACC = 11.2 percent

cost of equity = 16.8 percent

pretax cost of debt = 8.7 percent

tax rate = 35 percent

to find out

What does the debt-equity ratio need to be for the firm to achieve its target WACC

solution

we get here WACC that is express as

WACC = Wd × Rd × (1-t) + We × Ke      ..................1

here Wd is weight of debit and t is tax rate and Ke is cost of equity and

Wd + We = 1

so We = 1 - Wd

put value in equation 1

WACC = Wd × Rd × (1-t) + We × Ke

11.20% = Wd × 8.70%  ×(1-35%) + (1-Wd) × 16.80%

solve and we get

Wd = 0.5025

so We will be

We = 1 - 0.5025

We = 0.4975

and

Debt equity ratio will be

Debt equity ratio = \frac{0.5025}{0.4975}

Debt equity ratio = 1.01

6 0
3 years ago
What is the standard deviation of a stock that has a 10% chance of earning 18%, a 10% chance of making 11%, a 40% chance of maki
Yakvenalex [24]

Answer:

A. 7.95%.

Explanation:

Calculate the expected rate of return for the investment as follows:

\begin{aligned}\text { Expected rate of return } &=(\text { Probability } \times \text { Rate of return })+(\text { Probability } \times \text { Rate of return })+\\&(\text { Probability } \times \text { Rate of retum }) \\=&(0.40 \times 15 \%)+(0.50 \times 10 \%)+(0.10 \times-3 \%) \\=& 0.06+0.05-0.003 \\=& 0.107

Calculate the standard deviation of the investment as follows:

\begin{aligned}\text { Standard deviation }=&\left\{\begin{array}{l} \text { Probability } \left.\times(\text { Return }-\text { Expected return })^{2}\right)+ \\\text { (Probability } \left.\times(\text { Return }-\text { Expected return })^{2}\right)+ \\\text { (Probability } \left.\times(\text { Return }-\text { Expected return })^{2}\right)\end{array}\right.

=\sqrt{\left(0.40 \times(0.15-0.107)^{2}\right)+\left(0.50 \times(0.10-0.107)^{2}\right)+} \\=\sqrt{0.0007396+0.0000245+0.0018769} \\=\sqrt{0.002641} \\=0.05139066063011

7 0
3 years ago
Which kind of decisions involving resources must producers of goods and services make? ECONOMICS.
yawa3891 [41]
A.Allocating is the answer
5 0
3 years ago
Read 2 more answers
WACC and Optimal Capital Structure F. Pierce Products Inc. is considering changing its capital structure. F. Pierce currently ha
den301095 [7]

Answer:

The firm's optimal capital structure is 80% Debt and 20% Equity.

The WACC at this optimal capital structure is 10.28%.

Explanation:

Note: See the attached excel file the computation of the weighted average cost of capital (WACC) at the optimal capital structure. Also note that the data in the question are merged together but they are sorted in the attached excel file before answering the question.

The optimal capital structure of a firm can be described as a combination of debt and equity financing that is the beat in which market value of the firm is maximized while its cost of capital is minimized.

Using the weighted average cost of capital (WACC), the optimal capital cost capital structure occurs at a point where the WACC is the lowest.

From the attached excel file, the lowest WACC is 0.1028, or 10.28%.  At this firm Market Debt- to-Value Ratio (wd) which is debt is 0.80 (i.e. 80%), and Market Equity-to-Value Ratio (ws) which is equity is 0.20 (i.e. 20%).

Therefore, the firm's optimal capital structure is 80% Debt and 20% Equity.

The WACC at this optimal capital structure is 10.28%.

Download xlsx
5 0
2 years ago
Managerial implications for the SDT theory include: Group of answer choices to motivate high performance for uninteresting jobs
geniusboy [140]

Answer:

to motivate high performance for uninteresting jobs make performance contingent on extrinsic rewards.

Explanation:

Extrinsic rewards means the motivation i.e. controlled and produced via payment, awards and appreciations. In the case when the job is not interesting so the motivation level should be high in this situation and when the job is interesting the motivation level should not high

So as per the given situation, the above statement should be considered as an answer

4 0
3 years ago
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