Answer:
Explanation:
First, find the YTM of the bond (rD), you can do this with a financial calculator using the following inputs;
Maturity of the bond : N = 20
Annual coupon payment; PMT = 8%*1000 = 80
Face value; FV = 1000
Price of the bond ; PV = -1,050
then CPT I/Y = 7.51% (this is the Pretax cost of debt; the rD)
Next, find the cost of equity (rE) using CAPM;
CAPM; r = risk free + beta (Market risk premium)
rE = 0.0450 + 1.20(0.0550)
rE = 0.0450 + 0.066
= 0.111 or 11.1%
Next, WACC formula = wE*rE + wD*rD(1-tax) whereby;
w = weight of..
rD= pretax cost of debt
WACC = (0.65*0.111) + [0.35*0.0751(1-0.40) ]
WACC = 0.07215 + 0.015771
= 0.0879
Therefore, WACC = 8.79%
Answer:
Expected unit sales.
Explanation:
Production budget can be defined as a report or plan that measures the amount of units that will be produced during a particular period of time. It is used by manufacturers to measure what it would cost to manufacture a particular product.
Production budget is used by managers of different organisations to estimate the number of units that they have to produce in future periods which would be in the basis of the future estimated sales numbers. Managers also utilize this report as a planning tool for future production development, machine times, and planning.
Answer: Firms gain control over price in monopolistic competition by <u>"C) differentiating their products.".</u>
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Explanation: Monopolistic competition is an imperfect type of competition in which there is a high number of sellers in the market. The products offered are characterized by having some differentiation and it is precisely this differentiation that makes these companies enjoy a certain power of market, have a certain voice when setting their prices and are not merely "price-acceptors", as in the case of perfect competition.
D
Lump-sum taxes are described as regressive taxes, meaning that the more income one has, the less they pay in proportion of their income to tax. As a result, they all pay the same, which coincides with D.
Answer:
The correct answer is more inelastic; more elastic.
Explanation:
Inelastic demand is that demand that is not very sensitive to a change in price. In this way, before a variation in the price the quantity demanded reacts in a less than proportional way. For example, if the price increases by 10% and in response the quantity demanded is reduced by less than 10%, then the demand is said to be inelastic.
The elasticity of demand, also known as the elasticity-price of demand, is defined as the percentage change of the quantity demanded before a percentage change in the price.
An elastic demand is that demand that is sensitive to a change in price. In this way, a small variation in the price causes a more than proportional change in the quantity demanded. Thus, for example, if the price increases by 10% and in response the quantity demanded is reduced by more than 10%, then the demand is said to be elastic.
