Help with Wuestion 5 please

Problem 14-13 Calculating the WACC [LO3] Dinklage Corp. has 4 million shares of common stock outstanding. The current share pric

sleet_krkn [62]

Answer:

WACC = 8.97%

Explanation:

total value of equity = $70 x 4,000,000 = $280,000,000

cost of equity:

$70 = $4.4935 / (Re - 4.5%)

Re - 4.5% = 6.42%

Re = 10.92%

total value of debt:

$75 million x 0.95 = $71,250,000

YTM = {70 + [(1,000 - 950)/25]} / [(1,000 + 950)/2] = 72 / 975 = 7.3846%

$60 million x 1.07 = $64,200,000

YTM = {60 + [(1,000 - 1,070)/8]} / [(1,000 + 1,070)/2] = 51.25 / 1,035 = 4.9517%

weighted cost of debt = ($71,250,000 / $135,450,000 x 7.3846%) + ($64,200,000 / $135,450,000 x 4.9517%) = 3.8845% + 2.347% = 6.2315%

total value of the firm = $280,000,000 + $135,450,000 = $415,450,000

equity weight = $280,000,000 / $415,450,000 = 0.674

debt weight = 1 - 0.674 = 0.326

WACC = (0.674 x 10.92%) + (0.326 x 6.2315% x 0.79) = 7.36% + 1.605% = 8.965% = 8.97%

8 0

3 years ago

Adolescence is associated with

Taya2010 [7]

Adolescence is associated with genomically patterned consolidation of the hubs of the human brain connectome

6 0

3 years ago

Read 2 more answers

Social capital facilitates _______________. a. how the organization will spend its money b. the decision of whether to adopt a n

zvonat [6]

Answer: Option C

Explanation: Social capital refers to the additional success an organization get due to its positive relationships and communication network both within and outside the organisation. It is not a decision making but an ongoing process and is considered necessary in modern business environment.

The media houses could affect the business operations at a high level. Thus, positive relationships with the media houses can bring the organisation an edge over its competitors.

As it is related to relationship building and management it could be facilitated by the social capital.

7 0

3 years ago

The business market consists of all the organizations that acquire goods and services used in the production of other products o

RideAnS [48]

Answer:

The major types of industries that make up the business market are agriculture industry, forestry industry, mining industry, manufacturing industry ; construction industry and transportation industry; communication industry, banking, finance and insurance industry.

Explanation:

a) Agricultural industry entails group of firms involving in rearing of animal and growing of both cash crop or food crop either majorly for commercial purpose / use

b) Forestry industries are group of firm who specialize in afforestation and deforestation of trees with a goal of maintaining environmental well-being, majorly for commercial purpose

c) Mining industry are industry who specialize in extraction from the soil raw materials required by other industries. Extraction like crude oil, Coal

d) Manufacturing industry are group of firm whose main objectives is to process raw material into finish good for use by the market and for commercials industry.

e) Transport industry are industry that specialize in movement of people and cargo from one destination to another through land, rail, sea or road

f) Construction industry specializes in buildings of building, roads, bridges and other structure for commercial

and personal use.

g) Communication industry specializes in enabling individual to transmit information from his end to another end.. It ranges from Media to Internet and Phone as all these fall under communication community.

h) Banking, Finance and Insurance industry are industry who accept deposit, gives loans to organisation, provide insurance cover over a particular risk, offers organisation financial advice, offers audit.

4 0

3 years ago

The management team at Imagine Advertising is trying to land a new client. Carla, the CEO, has set targets for how much the cont

Liono4ka [1.6K]

Answer:

B) leading

Explanation:

Leading is a function of management which involves using influence to motivate employees and clients to achieve organisational and client goals respectively. Dominic and Stella possess the leading function due to their ability to influence the clients on how Imagine Advertising will help the clients achieve their goals.

5 0

3 years ago