It's important that when you're going to cut it, you stretch it so that you cut the right amount and look like the hair
Answer:
5.38 %
Explanation:
WACC = Cost of Equity x Weight of Equity + Cost of Debt x Weight of Debt
where,
Cost of Equity = 9.00 % (given)
After tax Cost of Debt = 6% x (1 - 0.21) = 4.74 %
Market Value of Equity = 1/5 x $13 million = $2.6 million
Weight of Equity = $2.6 million / $11.6 million = 0.22
Weight of Debt = $9 million / $11.6 million = 0.76
therefore,
WACC = 9.00 % x 0.22 + 4.74 % x 0.76
= 5.38 %
thus
the company’s WACC is 5.38 %
EAR = (1 + periodic interest rate)^N - 1
<u>9.25 % Quarterly %</u>
EAR =
= 0.09575 or 9.58%
<u>16.75 Monthly %
</u>
EAR =
= 0.1809766 or 18.10%
<u>15.25 Daily %
</u>
EAR =
= 0.1647053 or 16.47%
<u>11.25 Semiannually %</u>
EAR =
= 0.115664 or 11.57%
Answer:
At one time, the centrally planned economy of China encouraged farmers to produce iron in their backyards, rather than have factories make iron. This proved unsuccessful, since most of the farmers' iron was of poor quality. Why do you think this approach was unsuccessful? How could this experiment become a success in a free market economy?
The reason why the approach whereby farmers make iron in their backyard could not work out is as a result of not being inclined in that market as they are only skilled in agriculture, also they do not understand the rhetorics of the business.
The experiment would be a success in a free market as anyone is allowed to sell such product, this gives room for competition and helps to price reduction which is good for the consumers, also it would help in improvement of such product's quality because of competition involved
Explanation: