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tensa zangetsu [6.8K]
2 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:
motikmotik2 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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Alan Jackson invests $20,000 at 8% annual interest, leaving the money invested without withdrawing any of the interest for 8 yea
kondaur [170]

Answer:

a. $32,800

b. $37,019

c. $37,460

Explanation:

a. The computation of Total Amount Withdrawn by Alan when simple interest is shown below:-

Accumulated amount of money = Invested amount + (Rate of interest × Number of years)

= $20,000 + ($20,000 × 8% × 8)

= $32,800

b. The computation of Total Amount Withdrawn by Alan when annually Compounded is shown below:-

Accumulated amount of money = Invested amount × (1 + rate of interest)^Number of years

= $20,000 × (1 + 0.08)^8

= $20,000 × 1.85093

= $37,019

c. The computation of Total Amount Withdrawn by Alan when semi annually Compounded is shown below:-

Accumulated amount of money = Invested amount × (1 + rate of interest × Number of years ÷ 200)^16)

= ($20,000 × (1 + 0.08 × 8 ÷ 200)^16)

= $20,000 × 1.87298

= $37,460

Therefore we have applied the above formulas.

5 0
3 years ago
All of the following actions are consistent with feelings of regret except:________.
hram777 [196]

Answer:

Option A, selling losers quickly, is the right answer.

Explanation:

According to some researchers and their investigation consistency factors has the potential to influence feelings of regret. Regret may emerge as a function of consistency and discrepancy between an individual's orientation and effort of an evaluative decision. Whenever the decision-maker approves an orientation of serving errors associated with the actions are generally more consistent and thus led to comparatively less feeling of regret.

4 0
3 years ago
A conversion strategy whereby an organization uses the new system with select users/parts of the organization until issues are r
hoa [83]

Answer:

A) Pilot strategy

Explanation:

Under a pilot strategy, before a new system is fully implemented, it is first subjected to testing under a given situation by using it in selective parts of the organization , to assess it's compatibility with the situation or if the system requires necessary changes.

This could also be a kind of experimentation to evaluate the feasibility of a system before deciding upon it's final implementation.

If the system under consideration matches the desired results, the organization proceeds with it's full implementation in the entire organization.

If not, necessary changes need to be incorporated in the system.

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3 years ago
A subsidiary ledger:(A) used in place of the general ledger if the general ledger is destroyed or stolen.(B) a group of accounts
gayaneshka [121]

Answer:

The correct option is C

Explanation:

Subsidiary ledger are those kind of the ledger which is stated as the group of the similar or common accounts, whose combined balances are equal to the balance in the particular account of general ledger.

The general ledger is the account that summarizes or provide detailed information of the account balances of the subsidiary ledger is recognized as the control account or the master account.

The subsidiary ledger are those group of accounts which have a similar characteristic and provide summarized information regarding the control account.

3 0
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Which of these is critical information you should take into account when purchasing a new car? (5 points)
son4ous [18]

Answer:

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