A sole proprietorship is: Select one: A. the easiest type of business to set up B. the least profitable type of business to set
1 answer:
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Answer:
= 0.3274 or, 32.74%
Explanation:
We know,
Capital Structure = Debt + Common Stock + Preferred stock
Given,
Common Stock = 4,000,000 shares
Share price = $21
Total common stock = No. of shares x share price
Total common stock = 4,000,000 shares × $21 = $84,000,000
Preferred Stock = 3,000,000 shares
Share price = $10
Total preferred stock = $10 x 3,000,000 shares
Total preferred stock = $30,000,000
Debt rate = 111% = 1.11
Debt = 50,000 bonds x $1000 par x 1.11
Debt = $55,500,000
Total Capital = $(55,500,000 + 84,000,000 + 30,000,000)
Total capital structure = $169,500,000
The weight for debt in the computation of OMG's WACC
=
=
= 0.3274
or, 32.74%
Answer:
Yes it should as the net present value at the firm WACC is positive $ 4,156.54
Explanation:
we are given with the after-tax cost for the machine and after-tax cost of the labor cost savings the new machine will provide
So we should check if the present value of the savings is greater or equal than the machine cost:
C $ 8,000
time 10 years
rate=WACC= 0.1
PV $49,156.5368
Net present value:
inflow - cost
49,156.54 - 45,000 = 4,156.54