Answer:
The un levered beta ( bu) of the company is 1.52
Explanation:
Given information -
Equity (E) - $20 million
Debt (D) - $5 million
Beta ( levered ) - 1.75
Tax rate ( T ) = 40%
D / E ( Debt to Equity ratio ) = $ 5 million / $20 million = .25
Formula for taking out un levered beta ( bu) is -
Beta levered ( bl ) = Beta un levered ( bu ) [1 + (1 - T ) D / E ]
1.75 = bu [1 + (1 - 40% ) .25
1.75 = bu [1 + .6 x .25 ]
1.75 = bu [ 1 + .15 ]
1.75 = bu [ 1.15 ]
bu = 1.75 / 1.15
bu = 1.52
A SWOT analysis will identify Mcfarlane as a STRENGTH.
SWOT analysis refers to a study that is usually undertaken by companies in order to identify its internal strengths and weaknesses as well as its external opportunities and threats. In the question given above, Mcfarlane is a strength to his company because his efforts are beneficial to the company.
The average cost curve and the variable revenue curve are two lines which intersect at level of output when the firm is supplying and that business is earning zero economic profits.
If the price which the firm is charging from customer is higher than its average cost of production for the quantity of the goods produced, then the firm will earn profits to a large extent.
Conversely, if the price which is charged by the firm is lower than its average cost of production, the firm will suffer losses.
Thus when the cost is equal to the revenue of the firm it means there is no profit at all. At this level the average cost curve will intersect the revenue curve.
To know more about marginal cost curve here:
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Answer:
Resource View
Explanation:
A resource view or resource-based view is a strategic tool, hence its use by managers. It is bascially employed by management for the assessment of an organisation's strategic resources or assets in order to enhance the efficient and effective use of all available resources to maximize competitive advantage.
Some refer to the Resource Based View (RBV) as a managerial framework specifically employed to strategically maximize resource use for sustained advantage over competitors.
