1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
marta [7]
3 years ago
9

Bacchus Enterprises has $12B in book value of common stock selling at a book to market rate of 1.35 and a beta of 1.5. The combi

ned preferred stock is valued at $8.5B with a beta of 1.23. The restructured debt has a book value of $4.8B in book value and has a coupon of 6%, maturing in 9 years, and selling at 102.5%. The market is doing quite well and is returning 14% with a risk free asset returning 4%. What is the Cost of Preferred Stock
Business
1 answer:
goldfiish [28.3K]3 years ago
7 0

Answer: 16.3%

Explanation:

Given the details in the question, the cost of preferred capital can be calculated using the CAPM method.

Cost of preferred stock using the Capital Asset Pricing Model is:

= Risk free rate + Beta * ( Market return - Risk free rate)

= 4% + 1.23 * (14% - 4%)

= 16.3%

You might be interested in
Obeying the law is what kind of <br> Ethical Behavior
Lapatulllka [165]

Answer:

Basic level

Explanation:

Obeying the law is the basic demand of constitution of any country from its citizens. It is basically following the general rules of being the citizen of country.

Ethical behavior is about being morally right in your actions, it is no where defined properly what is ethical, sometimes even unethical behavior does not count in illegal behavior.

As for example if my colleague asks for a pen, and I do not help him, even though I have extra pen, is unethical behavior but it is not illegal.

But since it is unethical it is not correct morally, although all the legal actions are ethical.

4 0
3 years ago
Generally, revenue from sales should be recognized at a point when
qaws [65]

Answer:

D. none of these answer choices are correct.

Explanation:

The principle of revenue recognition occurs when the revenue is realized or earned either cash is received or not and it also serves the accounting accrual basis. Realizable also means that the buyer gets the product but the payment is made afterward.

In this, it does not depend on cash transactions.  

Hence, the option D is correct

3 0
2 years ago
Jamie works as a salesperson at a car dealership. He takes his sales very seriously. After selling a car to a customer, he waits
Aliun [14]

Answer:

The correct answer is E

Explanation:

Cognitive dissonance is the situation or circumstance which occur or happen when a person or an individual holds two or more ideas, values or beliefs which are contradictory or participates in action which might go against one of the three elements.

So, in this case, the sales person, who made a sales through selling a car to customer, tries to reinforce the fact by asking after 2 weeks, that they made a smart investment. Therefore, he is trying to reduce or decrease the cognitive dissonance.

4 0
2 years ago
Klamath+corporation+has+asset+turnover+of+3.5,+a+profit+margin+of+5.2%,+and+a+current+ratio+of+0.5.+what+is+klamath+corporation'
NARA [144]

Klamath corporation has insufficient information to find ROE.

Return on equity (ROE) is the degree to of an agency's internet earnings are divided by using its shareholders' equity. ROE is a gauge of a corporation's profitability and how successfully it generates one's income. The better the ROE, the higher an employer is at changing its fairness financing into income.

ROE is used while evaluating the monetary performance of agencies within the identical enterprise. it's far a measure of the capability of management to generate earnings from the equity available to it. A go-back of between 15-20% is considered good.

The return on equity is a degree of the profitability of an enterprise with regard to fairness. Because shareholder's equity may be calculated with the aid of taking all belongings and subtracting all liabilities, ROE also can be the idea of a return on belongings minus liabilities.

ROE=Profit margin*Total asset turnover*Equity multiplier

Hence since Equity multiplier data is not given.

Learn more about ROE here: brainly.com/question/26849182

#SPJ4

4 0
1 year ago
The exchange of information among dns servers regarding configured zones is known as:
olga nikolaevna [1]

The exchange of information among dns servers regarding configured zones is known as <u>"zone transfer".</u>


DNS zone transfer,  is a kind of DNS transaction. It is one of the numerous instruments accessible for managers to duplicate DNS databases over an arrangement of DNS servers.  

A zone transfer utilizes the Transmission Control Protocol (TCP) for transport, and appears as a client– server exchange. The customer asking for a zone exchange might be a slave server or optional server, asking for information from an ace server, in some cases called an essential server. The part of the database that is duplicated is a zone.


7 0
2 years ago
Other questions:
  • Telecom Co. enters into a​ two-year contract with a customer to provide wireless service​ (voice and​ data) for​ $40 per month.
    6·1 answer
  • There are innovations involving new ways to produce and conserve energy. If we can turn this new technology into marketable prod
    5·1 answer
  • Suppose First National Bank holds ​$100 million in assets with an average duration of 3 ​years, and it holds ​$90 million in lia
    15·1 answer
  • Assume that the company expects sales of each product to decline to 25,000 units next year with no change in unit selling price.
    11·1 answer
  • On July 1, 1992, Denver Corp. purchased 3,000 shares of Eagle Co.'s 10,000 outstanding shares of common stock for $20 per share.
    12·1 answer
  • How much does it cost to open a savings account??
    10·2 answers
  • When XYZ firm entered the market for good A two years​ back, it kept the price of its product low to attract customers away from
    8·1 answer
  • How does insurance fraud create higher overall prices for everyone?
    14·1 answer
  • True or False. A single working person may claim themselves as a dependent.
    10·2 answers
  • Performance reports with more than one cost driver typically have more accurate variances than those based on one cost driver.
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!