A third party help them to reach an agreement and this is meditation. Meditation is a practice where individuals train or operates their mind or induces a mode of consciousness. When the person meditate, this person wants more time to think and to make her mind calmer and be more focused.
Answer:
a.
WACC = 0.07961 or 7.961% rounded off to 7.96%
b.
After tax cost of debt = 0.0474 or 4.74%
Explanation:
a.
The weighted average cost of capital or WACC is the cost of a firm's capital structure. To calculate the WACC, we multiply the weight of each component of the capital structure by the cost of that component. The components of capital structure can be one or all of the following namely debt, preferred stock and common stock.
The formula for WACC is,
WACC = wD * rD * (1-tax rate) + wP * rP + wE * rE
Where,
- w represents the weight of each component
- r represents the cost of each component
- D, P and E represents debt, preferred stock and common stock respectively
WACC = 0.15 * 0.06 * (1 - 0.21) + 0.1 * 0.05 + 0.75 * 0.09
WACC = 0.07961 or 7.961% rounded off to 7.96%
b.
The after tax cost of debt is calculated by multiplying the cost of debt by (1 - tax rate) to adjust for the tax advantage provided by debt as interest payments on debt are tax deductible.
After tax cost of debt = 0.06 * (1 - 0.21)
After tax cost of debt = 0.0474 or 4.74%
Answer:
The correct word for the blank space is: higher.
Explanation:
Economies of Scale is a key concept for any business in any industry. It is also important for consumers trying to understand why smaller businesses may have to charge more for similar products made by larger companies. Overall, economies of scale mean <em>that production becomes more efficient as the number of goods being produced increases</em>.
Answer:
The risk premium is 4.4%
Explanation:
The risk premium on any given investment is the difference between the risky investment and the risk free investment and in this case we know treasury bonds are risk free and offer a certain return of coupons because they come from governments rather than the fictional ones like the one from risky investment inc so to find the risk premium we say :
Risk Premium = Risky investment rate - Risk free investment Rate
= 7.3% - 2.9%
= 4.4%
Answer:
Long term liability
Explanation:
Long term liability is defined as the amount of money a business owes that is due above a year. It is liabilities that do not affect the current liquidity of the business and its ability to do business.
In this scenario Chestelle Corporation has borrowed a large amount of money that is due in 4 years. It is due in over a year so it is a long term liability.
Long term liabilities are usually used to purchase capital assets or to make long term investment
