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tensa zangetsu [6.8K]
3 years ago
15

Brown Street Grocers has a cost of equity of 11.8 percent, a pre-tax cost of debt of 6.9 percent, and a tax rate of 35 percent.

What is the firm's weighted average cost of capital if the debt-equity ratio is 0.6? a. 11.80 percent b. 2.08 percent c. 9.70 percent d. 8.44 percent e. 9.06 percent
Business
1 answer:
motikmotik3 years ago
5 0

Answer:

The correct answer to the following question is option E) 9.06% .

Explanation:

Here the cost of equity given is  - 11.8%

Pre tax cost of debt- 6.9%

Tax rate- 35%

So the after tax cost of debt - 6.9% x 65%

= 4.485%

The debt to equity ratio - .6

So the weight of debt - .6 / ( 1 + .06 )

= .375

Weight of equity - 1 / ( 1 + .06 )

= .625

Weighted average cost of capital =

Debts cost x weight of debt + Equity cost x weight of equity

= 4.485 x .375 + 11.8 x .625

= 1.681875 + 7.735

= 9.06%

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Drag the tiles to the correct boxes to complete the pairs. Match the types of agreements to their descriptions.
bagirrra123 [75]

Answer:

A will has legal impact after you have passes away and has to be filed with the court.

A living will is similar to a regular will be takes effect while you are still alive to figure out where your assets should be placed.

A trust is an agreement that allows a third party to hold the assets on behalf of a beneficiary.

A prenuptial agreement is an agreement made before a marriage that explains what should happen to their assets in the event their marriage does not last. This is common in famous people due to the amount of money they have.

Explanation:

5 0
3 years ago
In February, Pedro, the manager of a pool supply and cleaning company, is looking at the upcoming need for more workers to handl
Mademuasel [1]

Planning is the management process that Pedro is using.

Answer: Option A.

<u>Explanation:</u>

Management process is the process that has certain steps and procedures in it that a business organisation needs to follow to achieve the goals of the organisation and for the betterment of the business organisation for which the employers are working.

The various steps and procedures of the management process are planning, organizing, managing, leading, controlling and so on. Planning is the management process in which all the resources needed to achieve the organisational goals are planned and there is proper thinking before acting to achieve the goals.

5 0
3 years ago
Three years ago, you invested $3,350.00. Today, it is worth $4,100.00. What rate of interest did you earn
Anastasy [175]

Answer:

6.97%

Explanation:

the formula to be used is

The formula for calculating future value:

FV = P (1 + r)^n

FV = Future value  

P = Present value  

R = interest rate  

N = number of years  

$4,100.00 = $3,350.00 x ( 1 + r)^3

divide both sides of the equation by $3,350.00

$4,100.00 / $3,350.00 = ( 1 + r)^3

1.223881 = ( 1 + r)^3

find the cube root of both sides

1.069661 = 1 + r

r = 6.97%

7 0
3 years ago
Effie Company uses a periodic inventory system. Details for the inventory account for the month of January, 2021 are as follows:
Lynna [10]

Answer:

Ending inventory : $868

Explanation:

FIFO (First-In-First-Out) is a method of inventory valuation where the inventory that is received first is sold first. In other words, the earliest inventory is used first. This is common for perishable inventory such as fruits and vegetables which if not used fast, will be wasted.

01/01/21 : Beginning Inventory : 200 units x $5 = $1000

01/15/21 : Purchases : 100 units x $5.3 = $530

01/28/21 : Purchases : 100 units x $5.5 = $550

Total units = 200 + 100 + 100 = 400 units

Units sold = Total inventory available for sale - ending inventory

= 400 - 160 = 240 units.

COGS:

Beginning Inventory : 200 units x $5 = $1000

Purchases : 40 units x $5.3 = $212

Cost of goods sold : $1000 + $212 = $1212

Ending inventory:

Purchases : (100 - 40) units x $5.3 = $318

Purchases : 100 units x $5.5 = $550

Ending inventory : $318 + $550 = $868

6 0
3 years ago
For a stock to be in equilibrium, two conditions are necessary: (1) The stock's market price must equal its intrinsic value as s
nevsk [136]

Answer:

True

Explanation:

For a stock to be in equilibrium, two conditions are necessary:

(1) The stock's market price must equal its intrinsic value as seen by the marginal investor;

(2) the expected return as seen by the marginal investor must equal his or her required return.

4 0
3 years ago
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