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Alborosie
3 years ago
7

Morrow Corp. has an EBIT of $925,000 per year that is expected to continue in perpetuity. The unlevered cost of equity for the c

ompany is 13 percent and the corporate tax rate is 25 percent. The company also has a perpetual bond issue outstanding with a market value of $2.55 million.
What is the value of the company?
Business
1 answer:
Vladimir79 [104]3 years ago
7 0

Answer:

The answer is given below;

Explanation:

WACC=EBIT*(1-t)/(E+D)

13%=$925,000*(1-25%)/(E+D)

E+D=$693,750/.13

E+D=$5,336,538

Where E+D is market value of firm

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If the price elasticity of demand for Mountain Dew is 4.4 then
taurus [48]

If the price elasticity of demand for Mountain Dew is 4.4 then "mountain dew has a high price elasticity of demand".

<u>Answer:</u> Option D

<u>Explanation:</u>

In economics "Price elasticity of demand" (PED) is a metric required to illustrate the flexibility or elasticity of a product or service's required quantity to increase its value when nothing but the value of product vary. When mountain dew have price elasticity of demand is 4.4 this follows that a price increase of 10 percent would result in the quantity needed decline by 44% as illustrated below:

4.4 = (% quantity change) / (% price change)

4.4 = x / 10

x = -4.4 (10) = -44%  here negative sign shows decline in quantity required.

3 0
3 years ago
Cost push is most likely to occur in those industries in which management or labor is so strong that it can dictate prices. True
krek1111 [17]

True because the cost economics is an economic model that includes the cost of negative

4 0
3 years ago
Match each type of tax with its correct description.
Masja [62]

Answer:

1. Medicare tax.

2. Local income tax.

3. Federal income tax.

4. Social Security tax.

5. State income tax.

Explanation:

Taxation can be defined as the involuntary or compulsory fees levied on individuals or business entities by the government to generate revenues used for funding public institutions and activities.

The various type of tax with their correct description are;

1. Medicare tax: it is used to support healthcare costs for retired workers. An example is the Affordable Care Act (ACA) which became effective on the 23rd of March, 2010 and it's focused on making affordable health insurance available to qualified people or households through cost-sharing reductions and premium tax credits (subsidies).

2. Local income tax: it is collected by town, school district, counties and cities to fund city or community programs.

3. Federal income tax: it is collected from most workers, who pay up to 39.6 percent of their earnings. This type of tax is paid by employees with respect to the amount of money they receive as their wages or salary.

4. Social Security tax: it is used to provide financial support to retired and disabled workers. In the United States of America, the Social Security Administration (SSA) adopted the Old-Age, Survivors, and Disability Insurance (OASDI) program to support retired and disabled workers.

5. State income tax: it is collected from workers in most states to fund their budget and the rate differs from state to state.

9 0
3 years ago
he controller of Wildhorse Industries has collected the following monthly expense data for use in analyzing the cost behavior of
Solnce55 [7]

Answer:

Variable cost per unit= $0.5

Explanation:

<u>To calculate the variable and fixed costs under the high-low method, we need to use the following formulas:</u>

Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)

Variable cost per unit= (5,420 - 2,925) / (8,870 - 3,880)

Variable cost per unit= $0.5

Fixed costs= Highest activity cost - (Variable cost per unit * HAU)

Fixed costs= 5,420 - (0.5*8,870)

Fixed costs= $985

Fixed costs= LAC - (Variable cost per unit* LAU)

Fixed costs= 2,925 - (0.5*3,880)

Fixed costs= $985

5 0
2 years ago
Whitmer Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.07 direct labo
professor190 [17]

Answer:

Instructions are below.

Explanation:

Giving the following information:

Each unit of output requires 0.07 direct labor-hours. The direct labor rate is $8.70 per direct labor-hour. The production budget calls for producing 6,000 units in February and 6,500 units in March.

We need to determine the total direct labor hours needed for each month.

February:

Total direct labor hours= 6,000*0.07= 420 hours

Total direct labor costs= 420*8.7= $3,654

March:

Total direct labor hours= 6,500*0.07= 455 hours

Total direct labor costs= 455*8.7= $3,958.5

7 0
3 years ago
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