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
Arte-miy333 [17]
3 years ago
11

Assume the corporate tax view of capital structure. Your unleveraged cost of capital is 13%. Your corporate tax rate is 30%. You

r firm proposes to borrow $800 and its leveraged firm value is $1,600. What is your cost of capital under the proposed leveraging?
A. 12.06%
B. 10.03%
C. 11.05%
D. 11.33%
Business
1 answer:
sergejj [24]3 years ago
8 0

Answer:

C. 11.05%

Explanation:

The computation of the cost of capital under the proposed leveraging is shown below;

cost of capital is

=Debt÷ value of leverged firm × ((unlevered cost of capital × (1 - tax rate))

=800 ÷ 1600 × ((13% + (13%) × (1 - 30%)))

= 11.0500%

hence, the cost of capital is 11.05%

You might be interested in
When a process is in control, it results in there being, on average, 16 defects per unit of output. c-chart limits of 8 and 24 w
rosijanka [135]

Answer:

4.56%

Explanation:

From the given information:

In a c-chart limit

UCL = \bar c+ z \times \sqrt{\bar c }

where;

\bar c = 16

UCL = 24

Then:

24 = 16 + z \times \sqrt{24}

24 -1 6 = z \times \sqrt{24}

8 = z \times 4.89

z = \dfrac{8}{4.89}

z \simeq 2.0

At z = 2.0, the value represents the probability of 95.44% of not making a Type 1 error.

This implies that the probability of making a Type 1 error = 1 - 95.44%

= 4.56%

3 0
3 years ago
Novak Corp. provides security services. Selected transactions for Novak Corp. are presented below. Oct. 1 Issued common stock in
enot [183]

Answer:

The attached shows the journal entries in respect of Novark Corp. transactions for the month of October.

Every transaction has two impacts-debit and credit

Explanation:

Journal is a book of prime entry where transactions that cannot be posted to other books of original entry are treated.

Journal entry also observes the duality concept of accounting where each transaction in two accounts,for every debit,there is corresponding credit and vice versa.

Journal can also  be used to correct errors made while posting to books of account.

Download xlsx
7 0
4 years ago
What are the phases in a business cycle?
-BARSIC- [3]
Recovery, Prosperity, Recession and Depression
8 0
3 years ago
How is healthcare an economic issue?
satela [25.4K]

health care coverage

4 0
3 years ago
Read 2 more answers
The exchange-rate effect is one of the reasons why the aggregate demand curve is downward sloping.
Tju [1.3M]

Answer:

True.

Explanation:

True, the given statement is right because the exchange rate or price of the currency is inversely related to the demand. when the exchange rate increases that means the price of the currency is increasing and in that case, the demand for the currency falls. If the exchange rate falls or the price of currency falls then demand for the currency rises that indicate the inverse relationship between the exchange rate and the aggregate demand. therefore, the aggregate demand curve is sloping downwards.

5 0
4 years ago
Other questions:
  • "A cost that is constant within a relevant range but differs outside the relevant range of activity is best classified as what t
    9·1 answer
  • The final resting temperature for sea food should be
    9·1 answer
  • Usually arise when companies give work groups complete autonomy and responsibility for task completion. continue
    5·1 answer
  • Situation 22-4 Joe is the owner-operator of Joe's Haircuts Unlimited. Last year he earned $200,000 in total revenues and paid $1
    12·1 answer
  • Oklahoma Oil Corp. paid interest of $780,000 during 2021, and the interest payable account decreased by $132,000. What was inter
    14·1 answer
  • A stock is selling today for $50 per share. At the end of the year, it pays a dividend of $3 per share and sells for $58. a. Wha
    10·1 answer
  • Why do firms in different countries form alliances with one another
    8·1 answer
  • Exercise 4
    6·1 answer
  • The lender, the depository institution, and the _______ all complete parts of the request for verification of deposit form.
    13·1 answer
  • Budgeting, analysis of investment proposals, and provision of funds are activities associated with the _______ function.
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!