Answer:
Debt-equity ratio = 0.34 or 34%
Explanation:
Weighted average cost of capital (WACC) = 12.7%
Cost of debt = 4.8%
Cost of equity = 15.4%
Let 'We' and 'Wd' be the fraction of capital corresponding to equities and costs, respectively, and that We + Wd =1.
The weighted average cost of capital is given by
The debt-equity ratio is:
Answer:
a.
The cost of equity is 10% if beta is 0.75
b.
The cost of equity is 11.20% if beta is 0.9
c.
The cost of equity is 12.40% if beta is 1.05
d.
The cost of equity is 13.60% if beta is 1.2
Explanation:
The SML approach is used to calculate the required rate or return (r) which is the minimum return that the investors require to invest in a company's stock. This is also referred to as the cost of equity. The formula for required rate of return under SML is,
r = rRF + Beta * (rM - rRF)
Where,
- rRF is the risk free rate
- rM is the return on Market
a.
r = 0.04 + 0.75 * (0.12 - 0.04)
r = 0.10 or 10%
b.
r = 0.04 + 0.9 * (0.12 - 0.04)
r = 0.112 or 11.20%
c.
r = 0.04 + 1.05 * (0.12 - 0.04)
r = 0.124 or 12.40%
d.
r = 0.04 + 1.2 * (0.12 - 0.04)
r = 0.136 or 13.60%
So here is the answer of the given question above:
In terms of economics, Harber's process takes a huge amount of capital. Initially, the process demands for a very high pressure and this is very expensive to produce. Second, the company would need to establish extremely sturdy pipes and containment vessels to endure the very high pressure, in order to produce this required condition; the building process is very costly as well as the maintenance. Hope this answer helps.
Answer:
Please refer to the below;
Explanation:
Difference between Floor inspection and Functional inspection.
• Floor inspection is usually conducted in a production environment. It involves checking of materials while processing in the machine by inspectors. Rather than checking the materials in the machine at the beginning of production, floor inspection checks the materials while in process inorder to ensure that the defected ones are quickly detected and expunged. It also ensure that the equipments used in processing are properly functioning.
• Functional inspection is an inspection that checks the overall function of a product rather than what makes up the component parts. For instance the load capacity and speed of a vehicle can be checked for optimal performance whereas individual parts that make up the vehicle are not checked, yet bring out satisfactory performance when combined together. This form of inspection is concerned with verification of final output and does not provide details about different sections instead provides a wider understanding of comfort that emanate from inspecting same item.
Points of Convergence between Floor inspection and Functional inspection.
• The key objective of both floor and functional inspection is quality output having reviewed and examined their expectations.
• Both floor and functional inspection work to prevent defective product from flowing down the successive operations and avoid loss to the company
• Both floor and functional inspection aim at meeting customers requirements, wants and needs.
