Answer:
Michalko's weighted-average cost of capital is 9.65 %.
Explanation:
Weighted Average Cost of Capital (WACC) is the return that is required by providers of Long term sources of finance.
WACC = Ke x (E/V) + Kp x (P/V) + Kd x (D/V)
Therefore,
Ke = Cost of Equity
= Return on Risk free Security + Beta x (Return on Market Portfolio - Return on Risk free Security)
= 4.2% + 1.25 × 6.2%
= 11.95 %
E/V = Market Weight of Equity
= $25,700/ ($25,700 + $19,100)
= 0.57
Kd = Cost of Debt
= Market Interest x ( 1 - tax rate)
= 11% × (1 - 0.40)
= 6.60 %
D/V = Market Weight of Debt
= $19,100/($25,700 + $19,100)
= 0.43
Thus,
WACC = Ke x (E/V) + Kd x (D/V)
= 11.95 % × 0.57 + 6.60 % × 0.43
= 9.65 %
Answer:
violates common law
Explanation:
A non compete is an agreement that restricts a previous employee from working for a competitor of his former company for a given period after disengagement.
This is a contract that aims to reduce to the rate at which company secrets are shared to competitors.
The rationale is that the employee's knowledge of the company's procedures will be obsolete after some years.
However non compete should not last for a very long time. Usually non compete of more than two to three years is not honoured by courts.
So in the given scenario where Harold the head chef at the Italian Olive Restaurant signed a non compete which restricts him from opening a restaurant for the next 15 years. The court will most likely not honour the non compete because the amount of time is not reasonable.
Answer:
Rise; More attractive; More; Less; Rise
Explanation:
Suppose that the federal budget deficit increases.
So, there is a need to borrow funds and this will increase the government borrowings. The higher government borrowings will lead to cause the interest rate to rise.
In an open economy, the buyers in the foreign countries are buying more U.S bonds as they will receive higher rate of return from investing in bonds. Hence, the U.S bonds are becoming more attractive to the foreign buyers because of the higher interest rate.
This will reduce the value of U.S exports, hence, the trade deficit (Value of imports - Value of exports) will rise further.
