Answer:
WACC = 11.45 %
Explanation:
Weighted average cost of capital is the average cost of all of the long-term types of finance used by a company weighted according to the that amount of finance used in relation to the total pool of fund
WACC = (Wd×Kd) + (We×Ke) + (Wp × Kp)
After-tax cost of debt = Before tax cost of debt× (1-tax rate)
Kd-After-tax cost of debt = 11.1%(1-0.4) =6.66%
Ke-Cost of equity = 14.7%
Kp= Cost of preferred stock = 12.2%
Wd-Weight of debt =100/270=0.370
We-Weight of equity = 140/270=0.518
Wp= weight of preferred stock = 30/270=0.111
WACC = (0.518× 14.7%) + (0.370 × 6.7%) + (0.111×12.2) = 11.447%
WACC = 11.45 %
Answer:
1. c. a consolidation
2. a. all of Shale's and Tierra's assets
3. c. all of Shale's and Tierra's debts
Explanation:
1. When multiple companies join up together to form a new company, this is called a Consolidation which is what Shale Shale Oil Corporation and Tierra Frakking Company did when they formed Unified Resources, Inc.
2. In a Consolidation, the previously separate companies move in with all their debt and assets to form the new company. As such, Unified Resources acquires all of Shale's and Tierra's assets.
3. As previously stated, in a Consolidation, the previously separate companies move in with all their debt and assets to form the new company. As such, Unified Resources assumes all of Shale's and Tierra's debts as well.
Answer:
The understatement of the ending inventory balance would result in an overstatement of the cost of goods sold. This will in turn result in an understatement of the gross and net profits for the year in the p/l.
Explanation:
The relationship between the elements of inventory in a financial statement is as shown below,
Opening balance + purchases - cost of goods sold = closing balance
As such, the understatement of the ending inventory balance would result in an overstatement of the cost of goods sold. This will in turn result in an understatement of the gross and net profits for the year in the p/l.
Answer:
2.361
Explanation:
Calculation to Find the value of the test statistic
Based on the given information let our:
p=0.25
x = 159
n = 540
Since our p is 0.25 the first step is to find q using this formula
q = 1 - p
Let plug in the formula
q = 1-0.25
q= 0.75
Second step is to find the psample using this formula
psample= x/n
Let plug in the formula
psample= 159/540
psample = 0.294
Last step is to find the value of the test statistic
Using this formula
z= (psample - p) / √(pq/n)
Let plug in the formula
z = (0.294 - 0.25) / √(0.25×0.75/540)
z=0.044/√(0.1875/540)
z=0.044/√(0.000347222222)
z=0.044/0.01863389
z=2.361
Therefore the value of the test statistic will be 2.361
Answer:
b. 3 percent.
Explanation:
Real interest rate is nominal interest rate less expected inflation rate.
Real interest rate = nominal interest rate - expected inflation rate
8% - 5% = 3%
I hope my answer helps you
