Answer:
WACC = Ke(E/V) + Kd(D/V)(1-T) + Kp(P/V)
WACC = 15(60/100) + 5(30/100)(1-0.3) + 10(10/100)
WACC = 9 + 1.05 + 1
WACC = 11.05%
Explanation:
Weighted average cost of capital is a function of cost of common stock and the proportion of common stock in the capital structure plus after-tax cost of debt and proportion of debt in the capital structure plus cost of preferred stock and the proportion of preferred stock in the capital structure. Ke = Cost of equity or common stock, kd = cost of debt and kp = cost of preferred stock.
We will be participating in (A) rights offer if you opt to purchase the shares you have been offered.
<h3>
What is Rights Offering?</h3>
- A rights offering (rights issue) is a set of rights granted to existing shareholders to purchase more stock shares in proportion to their existing holdings, known as subscription warrants.
- These are considered a sort of option since they enable stockholders of a firm the right, but not the responsibility, to purchase more shares in the company.
- The subscription price at which each share may be purchased in a rights offering is often discounted relative to the current market price.
- Rights are frequently transferrable, giving the possessor the ability to sell them on the open market.
- Each shareholder in a rights offering receives the opportunity to purchase a pro-rata allotment of extra shares at a certain price and within a specific time frame (usually 16 to 30 days).
Therefore, we will be participating in (A) rights offer if you opt to purchase the shares you have been offered.
Know more about Rights Offering here:
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The complete question is given below:
Currently, you own 5.4 percent of the outstanding stock of Keiffer Industries. The firm has decided to issue additional shares of stock and has given you the first option to purchase 5.4 percent of those additional shares. Which one of the following will you be participating in if you opt to purchase the shares you have been offered?
A. Rights offer
B. Red herring offer
C. Private placement
D. IPO
E. General cash offer
Answer:
Operating Activities
Received cash payments from customers.
Purchased inventories with cash.
Paid cash interest on outstanding notes.
Paid accounts payable with cash.
Investing Activities
Sold stock investments for cash.
Received cash from sale of equipment.
Received cash dividends from investments.
Financing Activities
Received cash from short-term debt issuance.
Paid cash dividends.
Received cash from long-term debt issuance.
Explanation:
Operating Activities consist of trading activities of the business.
Investing Activities consists of acquisition and sale of investments
Financing Activities costs of sourcing and repayments of sources of finance
Answer:
B. total revenue will decrease.
Explanation:
The initial revenue for breakfast cereal is given by the product between the price of cereal (P) and the demanded quantity (D):
After a 25% decrease in price and a 20% increase in demand, the new revenue will be:
The new revenue is 90% of the original revenue; therefore, total revenue will decrease.
Ummmm I really don’t know but I have to answer a question to ask one
