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nasty-shy [4]
2 years ago
9

'Modigliani Manufacturing has a target debt-equity ratio of .50. Its cost of equity is 18 percent and its cost of debt is 11 per

cent. If the tax rate is 35 percent, what is Modigliani's WACC
Business
1 answer:
andriy [413]2 years ago
8 0

Answer:

the Weighted average cost of capital is 14.38%

Explanation:

The computation of the weighted average cost of capital is shown below:

Weight of equity is

= 1 ÷ (1 + Debt equity Ratio)

= 1 ÷ 1.5

And, Weight of Debt is

= 0.5 ÷ 1.5

Now

WACC = Weight of Equity × Cost of Equity + Weight of Debt × Cost of Debt × (1 - Tax rate)

= 1 ÷ 1.5 × 18% + 0.5 ÷ 1.5 × 11% × (1 - 35%)

= 14.38%

hence, the Weighted average cost of capital is 14.38%

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It can be said that kent and julie have Low Inter-rater Reliability.

<h3>What is Inter-rater Reliability?</h3>
  • Inter-rater reliability is a statistical metric used to assess the degree of consensus among various judges or raters.
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1 year ago
X-inefficiency refers to a situation in which a firm: Group of answer choices fails to realize all existing economies of scale.
Veronika [31]

Answer:

fails to achieve the minimum average total costs attainable at each level of output.

Explanation:

X Inefficiency do take place in a firm when there is little or no incentive in controlling costs. As a result of this average cost of production will go up than necessary. And as a result of lack of incentives, technically, the firm will be far from efficient. It should be noted that X-inefficiency could be described as a situation in which a firm fails to achieve the minimum average total costs attainable at each level of output.

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Change from the fair value method to the equity method Assume an investor company acquires for $256,000 an 8% investment in the
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Answer:

Date         Account title and explanation      Debit        Credit

March 1    Equity investment                          $32,000

                ($612,000/17%)*8% - $256,000)

                       Unrealized holding gain                             $32,000

               (To adjust the value of equity investment)

Note: On 1 march, value of the investment value is increased which is unrealized based on 31 December fair value

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Answer:

The process of joint decision making in which employees share a high degree of decision-making power with their superiors is called Participative Management

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True/False/Explain – If all production processes were subject to constant returns to scales for all output levels, monopolistic
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The answer is true okay!
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