PLEASE HELP ME!!!!!

Baron Corporation has a target capital structure of 65 percent common stock, 10 percent preferred stock, and 25 percent debt. It

astraxan [27]

Answer:

WACC is 7.24%

After tax cost of debt is 3.95%

Explanation:

WACC=Ke*E/V+Kd*D/V*(1-t)+Kp*P/V

Ke is the cost of equity of 9% or 0.09

Kd is the cost of debt at 5% or 0.05

Kp is the of preferred stock of 4% or 0.04

E is the weight of equity of 65% 0r 0.65

D is the weight of debt of 25% 0.25

K is the weight of preferred stock of 10% or 0.10

t is the tax rate of 21% or 0.21

WACC=(0.09*0.65)+(0.05*0.25*1-0.21)+(0.04*0.10)

WACC=(0.09*0.65)+(0.05*0.25*0.79)+(0.04*0.10)

WACC=7.24%

after tax cost of debt=pretax cost of debt*(1-t)

=0.05*(1-0.21)

=0.0395=3.95%

5 0

3 years ago

What are the characteristics of a public company

S_A_V [24]

Answer:

Features of Public Limited Company:

Easy Transferability.

Perpetual Succession.

Limited Liability.

Paid-Up- Capital.

Name.

Directors.

Prospectus.

Borrowing capacity.

Explanation:

4 0

2 years ago

Martha is looking into investing a portion of her recent bonus into the stock market. While researching different companies, she

nata0808 [166]

Answer:

Martha

Based on the data and assuming these trends continue,

Investment in Handy Prosthetics is preferred as it would give Martha a stable long-term investment.

Explanation:

a) Data:

Handy El Lobo Malo

Prosthetics Incorporated

Standard deviation of stock prices = $1.05 $9.82

b) The above standard deviations measure the spread of the stock prices over their daily stock closing prices in one year. The Handy Prosthetics' stock does not fluctuate as much as the El Lobo Malo's stock. This reduced fluctuation in prices makes it a more stable investment than El Lobo Malo's stock. Therefore, Martha should prefer the Handy's stock to the El Lobo Malo's stock.

6 0

2 years ago

The Assembly Department produced 5,000 units of product during March. Each unit required 2.20 standard direct labor hours. There

insens350 [35]

Answer:

The journal entry is as follows:

Explanation:

Work in Progress A/c............................................Dr $198,000

Labor efficiency variance(unfavourable)...........Dr $9,000

Labor rate variance A/c........................Cr $4,600

Wages Payable A/c.................................Cr $202,400

Working Note:

Standard hour = Standard direct labor hours × (Standard hour - Actual hour)

= $2.2 × 5,000

= $11,000

Labor efficiency variance = $18 × (11,000 - 11,500)

= $18 × 500

= $9,000

Standard cost = Standard rate × Standard hour

= $18 × 11,000

= $198,000

Actual Cost = Actual rate × Actual hour

= $17.6 × 11,500

= $202,400

6 0

3 years ago

Shelton, Inc. has sales of $435,000, costs of $216,000, depreciation expense of $40,000, interest expense of $21,000, and a tax

sattari [20]

Answer:

a. Net income = $107,200

b. Addition to retained earnings = $72,700

Explanation:

a. What is the net income for the firm?

Net income which also referred to a s net earnings is estimated by deducting cost of goods sold, selling and distribution expenses, administrative expenses, depreciation expenses, interest expenses, taxes, and other relevant expenses from sales.

b. What is the addition to retained earnings?

Addition to retained earnings is obtained by deducting the cash dividends from the net income.

For this question, the net income and addition to retained earnings can be calculated by preparing an income statement as follows:

Shelton, Inc.

Income Statement

For the year ....

Particulars $

Sales 435,000

Costs of sales (216,000)

Gross profit 219,000

Depreciation expense (40,000)

Interest expense (21,000)

Income before tax 158,000

Tax ($158,000 * 35%) (55.300)

Net income 102,700

Cash dividends (30,000)

Addition to retained earnings  72,700 

Therefore, Net income is $107,200, and addition to retained earnings is $72,700.

4 0

2 years ago