1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
hichkok12 [17]
3 years ago
12

Calculate a firm's WACC given that the total value of the firm is $2 million, $600,000 of which is debt, the pre-tax cost of deb

t is 10%, and the cost of equity is 15%. The firm pays no taxes.
Business
1 answer:
butalik [34]3 years ago
6 0

Answer:

the weightage average cost of capital of the firm is 13.50%

Explanation:

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

WACC = Cost of debt × weightage of debt + cost of equity × weightage of equity

= 10% × ($600,000 ÷ $2,000,000) + 15% × ($1,400,000 ÷ $2,000,00)

= 3% + 10.5%

= 13.5%

hence, the weightage average cost of capital of the firm is 13.50%

You might be interested in
The Rodriquez family is determined to purchase a $250,000 home without incurring any debt. The family plans to save $2,500 a qua
dexar [7]

Answer:

70years

Explanation:

The future value formula for compound interest, after n interest period is

F=P(1+i)^n

where i is the interest rate per period in decimal form and P is the principal or present value.

The Rodriquez family is determined to purchase a $250,000 home so

F=$ 250,000

The family plans to save $2,500 a quarter for this purpose and expects to earn 6.65 percent.

This implies that:

i =  \frac{0.0665}{4}  = 0.0016625

For t years, the number of compounding periods will be;

n = 4t

We fixed the values into the formula and solve for t.

250000=2500(1+0.0066125)^ {4t}

\frac{250000}{2500} =(1.0066125)^ {4t}

100=(1.0066125)^ {4t}

100=(1.0682)^ {t}

t =  log_{1.0682}(100)

t = 69.8

It will take approximately 70years

3 0
3 years ago
The following selected transactions were completed by Fasteners Inc. Co., a supplier of buttons and zippers for clothing:
Lera25 [3.4K]

<u>Solution and Explanation:</u>

The following journal entries will be passed in the book sof fasteners Inc., Co., which is a supplier of buttons and zippers for clothing

Date        Accounts Titles and Explanation  Post Ref    Debit  Credit

1 Nov-21  Notes receivable                                      $ 72,000  

      Accounts receivable-McKenna Outer Wear Co.        $ 72,000

2  Dec-31  Interest receivable (72000 * 9 \% * 40 / 360)    $720  

 Interest revenue                                                     $ 320

3  Jan-20  Cash                                           $ 73080  

 Interest revenue (72000 * 9 \% * 20 / 360)         $360

 Interest receivable                                          $720

 Notes receivable                                               $72,000

Note: the figures have been calculated and rounded off in the nearest dollar amount.

4 0
3 years ago
When there is a challenge, Luis is up for it. Deadlines and complex tasks that would send others running are enjoyable to Luis,
frez [133]

Answer: internal locus of control

                             

Explanation: There is a phenomenon known as the locus of control throughout the psychological literature that is new for most people, although it is universally understood once it is described.

Locus of influence is the system of beliefs of a person about the reasons of his or her experiences and the reasons that the participant contributes to final outcome.

Typically, this definition is separated into two categories: internal and external. If an individual has an internal control locus, that person will assign success to their own contributions and capabilities.

6 0
3 years ago
You have $35,900 on deposit with no outstanding checks or uncleared deposits. One day you write a check for $4,200 and then depo
maw [93]

Answer:

Explanation: from the question above, disbursement for the period is check for $4,200.

Collection for the period is a check for $6,800.

Net float is $35,900 + $6,800 - $4,200. = $38,500

5 0
3 years ago
Let's think about billions by looking at Bill Gates, president of Microsoft. One year, his personal wealth grew by $20 billion.
marta [7]

Answer:

No, he should <u>not</u> pick up the $100 bill

Explanation:

If his salary were those $20 billion (20,000,000,000) by a year. Let's find out how much this is by a second.

First let's find out how much is that salary by <em>a day</em>, then by <em>an hour</em>, then by <em>a minute</em> and finally by <em>a second</em>.

\frac{20,000,000,000}{year}*(\frac{1 year}{365d})*(\frac{1d}{24h})*(\frac{1}{60min} )*(\frac{1min}{60s} )  \\\\  =\frac{20,000,000,000}{365*24*60*60} \\ \\ =\frac{20,000,000,000}{31,536,000} \\ \\ =634.19

So he would be losing money if he picks up the $100 bill, because he would be missing 634 dollars per second.

6 0
3 years ago
Other questions:
  • Which basic objective of direct marketing involves attempting to motivate customers to visit an event or retail outlet?
    14·1 answer
  • The owner of bobcats r us paid his personal mastercard bill using a company check. the correct entry to record the transaction i
    6·2 answers
  • GloboTron is headquartered in Argonia, and it operates over 500 factories around the world. It is one of the world's major produ
    8·1 answer
  • Consumers value Secret antiperspirant deodorants more than they value store brand antiperspirant deodorants and are willing to p
    9·1 answer
  • The team act was introduced in congress to explicitly outlaw labor-management committees that do not seek to negotiate collectiv
    10·1 answer
  • Serge supervises toolmakers who make custom parts for the engineering department before these parts go into production. Deshaun
    15·1 answer
  • Type the correct answer in the box. Spell all words correctly. While executing a project, it is important to express mutual_____
    12·1 answer
  • g This year, Nilo Inc. granted nonqualified stock options to 230 employees. For financial statement purposes, Nilo recorded a $1
    10·1 answer
  • Speaking effectively, writing concisely, and listening attentively are all examples of the transferable skill of
    8·2 answers
  • The process of dividing work activities into separate job tasks is known as ________.
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!