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
tiny-mole [99]
3 years ago
12

Shirley’s and Son have a debt-equity ratio of .60 and a tax rate of 35 percent. The firm does not issue preferred stock. The cos

t of equity is 10 percent and the pre-tax cost of debt is 8 percent. What is Shirley’s weighted average cost of capital?
a. 8.4%
b. 6.1%
c. 9.4%
d. 8.2%
e. 9.1%
Business
1 answer:
ikadub [295]3 years ago
8 0

Answer:

d. 8.2%

Explanation:

The computation of the WACC is shown below:

= Weightage of debt × cost of debt × ( 1- tax rate) + (Weightage of  common stock) × (cost of common stock)

where,  

Weighted of debt = Debt ÷ total firm

= (0.60 ÷ 1.60)

= 0.375

And, the weighted of common stock = (Common stock ÷ total firm)

                                                              = 1 ÷ 1.60

                                                              = 0.625  

The total firm is

= 0.60 + 1

= 1.60

Now put these values to the above formula  

So, the value would equal to

= (0.375 × 8%) × ( 1 - 35%) + (0.625 × 10%)

= 1.95% + 6.25%

= 8.20%

You might be interested in
One of the claims of ______ is that prejudice stems from people's desire to maintain dominance and social hierarchies.
wariber [46]
A) face negotiation theory
6 0
4 years ago
true or false: market-based forecasting of exchange rates has shown to be more consistent and reliable than the other primary fo
soldier1979 [14.2K]

True, Compared to the other main forecasting techniques, market-based forecasting of exchange rates has proven to be more reliable and consistent.

What is Market-based forecasting?
By utilising a wide range of data that describe the nature of demand within the organization's service area, market-based demand forecasting is a technique for estimating future demand for a healthcare organization's services. The primary and secondary service areas, population breakdowns by various demographic categories, discharge utilisation rates, market size, and market share by service line and overall are just a few examples of the information we're talking about. Strategic planners can develop scenarios describing potential future demand based on observable market dynamics and a variety of explicit assumptions about future trends. Then, financial planners can assess every scenario to see how it might affect particular financial and operational metrics, like operating margin, days with cash on hand, as well as debt-service coverage, and create a strategic financial plan that accounts for a variety of contingencies.

To learn more about Market-based forecasting
brainly.com/question/29222915
#SPJ4

3 0
1 year ago
If Janet decides to wear her favorite red shirt instead of her favorite blue dress, she is making what?
tatuchka [14]

Answer:

she is making a decision?

8 0
3 years ago
Read 2 more answers
Why is it difficult for most small business owners to raise the capital needed to start, operate, or expand their ventures?
Andre45 [30]

Answer:

1. It is not easy to get funds for a start up, as many banks do not consider it as a successful decision to provide loan to a start up, as the feasibility of recovery of loan cannot be identified and guaranteed.

2. Venture capitalists also faces the same issue as of bank, also they are large equity investors and tend to invest in even larger project.

3. Private investors do not blindly invest and rather are more cautious then banks or venture capitalists, as because they do not huge funds to invest, and with less amount of investment they need even higher assurance.

4. Public stock is never available for a start up as for public stock issue you need great credibility, and good previous record.

4 0
3 years ago
Arrange the steps for conflict resolution in proper sequence. Every individual involved in the conflict is encouraged to offer a
Lyrx [107]

-Individuals involved in the conflict is encouraged to come together.

-Every individual involved in the conflict expresses his or her opinion in an open manner.

-Every individual involved in the conflict is encouraged to offer a solution.  

-Discuss all the solutions and decide on the one that satisfies everyone.

8 0
4 years ago
Other questions:
  • On may 20, 2010, tony blackman bought 100 shares of stock from xyz corporation. the quarterly dividend is $1.25 per share and th
    5·1 answer
  • Total quality management differs from traditional performance measurement in that it:
    7·1 answer
  • Be-The-One is a motivational consulting business. At the end of its accounting period, December 31, 2017, Be-The-One has assets
    10·1 answer
  • Barry, a solvent individual but a recovering alcoholic, embezzled $6,000 from his employer. In the same year that he embezzled t
    14·1 answer
  • What commodities are grown for a purpose other than food?
    15·1 answer
  • Afirm expects to sell 25,000 units of its product at $11 per unit. Pretax income is predicted to be $60,000. If the variable cos
    5·2 answers
  • Assume the real rate of interest is 3.00% and the inflation rate is 6.00%. What is the value today of receiving 14,488.00 in 13.
    13·1 answer
  • Find the most recent federal deficit as a percentage of GDP of the United States. Suppose that the federal budget deficit was el
    7·1 answer
  • Wheeler’s Bike Company manufactures custom racing bicycles. The company uses a job order cost system to determine the cost of ea
    11·1 answer
  • When Bonita put together a research report for her company, what would she have included in the references section?
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!