Answer and Explanation:
a. The computation of the wacc is as followS;
= cost of common stock × weight of common stock + cost of debt × weight of debt × (1 - tax rate)
= 0.16 × 0.70 + 0.08 × 0.30 × (1 - 0.30)
= 0.112 + 0.0168
= 0.1288
= 12.88%
b. The after tax cost of debt is
= 0.08 × (1- 0.30)
= 0.056
So the capital should use the cost of debt
Answer:
The bank will create excess reserve of $200 billion
Explanation:
The question measures the size of credit expansion associated with the new currency deposit. the computation below shows how excess reserves can be computed.
Money multiplier = 1
/Legal Reserve Ratio = 1/0.2 = 5
Excess Reserve Created = A x (1
/Legal Reserve Ratio)
Where: A = New currency deposit = $40
Legal Reserve Ratio = 0.20
Excess Reserve Created = $40 x (1/0.2) = $40 x 5 = $200 billion
The legal reserve of 5 indicates that for every unit of money reserved by banks, they are able to create 5 units of same.
The money creation capability of the banking system as a whole is depends on the legal reserve ratio. Legal reserve ratio is a fraction of a bank deposit which the law requires them to hold. The bank can only lend the balance after deducting the legal reserve.
Answer: price behavior that differs from the behavior predicted by the efficient market hypothesis
Explanation: In simple words, market anomaly refers to the difference in the price of the securities that occurs due to the variable factors that were not considered appropriately in the efficient market hypothesis.
The environment of market is very dynamic and there are certain variables that could not be predicted completely. Hence the prices of securities differes from hypothesis in actual.
<span>It functions like a business but uses the money it makes to fund the cause identified in its charter. The student organization does not make any profits on their activities and instead donates them to charity.</span>
Answer: The landlord would have to make the environment conducive for leaving and the tenant would have pay rent and refrain from causing problems
Explanation:
The landlord and tenant have rights and duties to perform. The main duty of the landlord is to meet the warranty of habitability; ensuring the premises is safe and is in livable condition.
Whereas the duty of the tenant is to pay rent, ensure the environment occupied is neat, avoid causing problems for individuals around and refrain using the property for illegal purpose.
The right transferred by lease is an agreement by the tenant (the assignor) to transfer all of his or her rights, title, and interest in the lease to another person (the assignee).
A sublease is the lease of a property by a tenant to a subtenant.
