1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Licemer1 [7]
3 years ago
5

Filter Corp. maintains a debt-equity ratio of .45. The cost of equity is 14.7 percent, the pretax cost of debt is 8.1 percent, a

nd the marginal tax rate is 34 percent. What is the weighted average cost of capital?
Business
1 answer:
trapecia [35]3 years ago
7 0

Answer:

11.78%

Explanation:

Weighted average cost of capital WACC determines firms cost of capital. It includes all sources of finance which are included in firms capital structure. The WACC is calculated with given formula:  

WACC = E/V Re + D/V * Rd (1 - T)

Re = cost of equity

V = Firms Market value of Debt and Equity

Rd = Cost of debt

E = market value of equity

D = market value of debt

T = Marginal Tax rate

WACC = 14.7 * 1 / 1.45 + 8.1 * 0.45 / 1.45 (1 - .34)

WACC = .1013 + 0.0165

WACC = 11.78%

You might be interested in
The types of resources needed by a business are financial, physical, and labor resources.
sukhopar [10]

Answer:

a. True

Explanation:

The above is true because financial resources are needed to enable a business meet up with its daily activities in terms of funding. Also, physical resources are buildings, machineries and assets in general which are required to carry a business daily operations. The labor resources, which is the most important resources are the workforce that carry out the day to day operations of a business.

8 0
3 years ago
The money supply will grow faster through deposit creation when the required reserve ratio is: a. high and banks hold excess res
Strike441 [17]

Answer:

c. low and banks are unable to loan out all of their excess reserves. d

Explanation:

Lower required reserve ratio means banks have more money to lend. When banks are able to lend all its excess money, then money supply increases for citizens.

7 0
3 years ago
The Durham-Mills Self-Administering Test of Mental Ability was the first group-administered mental ability test to have widespre
forsale [732]

Answer:

False

Explanation:

The Otis Self-Administering Test of Mental Ability was the first group-administered mental ability test to have widespread use in industry.

This test was first developed in 1922 by Arthur Otis. It was first designed to measure students' general school abilities. Otis's first tests were designed for the Army in 1917 and were known as the Alpha tests (for those who could read) and the Beta tests (for those who couldn't read).

7 0
3 years ago
A negative externality is
Rus_ich [418]

Answer: The correct answer is "4. when a third party is injured by an economic activity".

Explanation: A negative externality is when a third party is injured by an economic activity.

Negative externality refers to all kinds of harmful effects on society, generated by production or consumption activities, which are not present in its costs. Negative externalities occur when the action taken in our activities as a company, individual or family causes harmful side effects to third parties. Such effects are not incorporated in all costs. Since the highlighted negative effects are not present in the price of production or of the profit when consuming.

3 0
3 years ago
If Apr of a savings account is 2.7% and interest is compounded quarterly, what is the approximate APY of the account
solniwko [45]

Answer:

0.0273 = 2.7%

Explanation:

APY = (1 + r/m)^m - 1

       = (1 + 0.027/4)^4   -  1

       = 0.0273 = 2.73%

8 0
3 years ago
Other questions:
  • Gordon Corporation produces 1,000 units of a part per year which are used in the assembly of one of its products. The unit cost
    9·1 answer
  • Jake owns Delta Dew, a small local California marijuana producer and dispensary. Jake complies with all applicable state laws an
    11·1 answer
  • Everything at the small sit-down dinner party has gone beautifully. You go to finish off the evening with a flare by bringing in
    8·1 answer
  • Stockholders equity can be described as claims of
    5·1 answer
  • Nike inadvertently offended Chinese officials when it ran an ad featuring LeBron James crushing a number of revered Chinese figu
    14·1 answer
  • Strategic Review Process Element
    7·1 answer
  • What is another term for liability?<br> A. asset<br> B. notes<br> C. debt<br> D. accounts
    6·1 answer
  • "Consider a C corporation. The corporation earns $2.5 per share before taxes. After the corporation has paid its corresponding t
    10·1 answer
  • You have purchased a put option on Kimberly Clark common stock. The option has an exercise price of $95.00 and Kimberly Clark's
    6·1 answer
  • The federal and most state judicial branches have at least these three levels in the court system:
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!