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
kykrilka [37]
3 years ago
6

ou were hired as a consultant to Quigley Company, whose target capital structure is 35% debt, 10% preferred, and 55% common equi

ty. The interest rate on new debt is 6.50%, the yield on the preferred is 6.00%, the cost of retained earnings is 10.50%, and the tax rate is 25%. The firm will not be issuing any new stock. What is Quigley's WACC
Business
1 answer:
lukranit [14]3 years ago
4 0

Answer:

8.08%

Explanation:

WACC = (E/V)*Re + (D/V)*Rd*(1-Tc)

Re = cost of equity, Rd = cost of debt, E = market value of the firm's equity, D = market value of the firm's debt, V = E + D, E/V = % of equity financing, D/V = % of debt financing, Tc = corporate tax rate

WACC = (10%*6%) + (55%*10.50%) + (35%*6.50%)*(1-25%)

WACC = (0.1*0.06) + (0.55*0.105) + (0.35*0.065*0.75)

WACC = 0.006 + 0.05775 + 0.0170625

WACC = 0.0808125

WACC = 8.08%

So therefore, Quigley's WACC is 8.08%.

You might be interested in
In the middle of the fourteenth century, an epidemic known as the Black Death killed a third of Europe’s population, about 34 mi
9966 [12]

Answer:

The black death epidemic resulted to death about 34 million European, left more job vacant. This was becuase many workers died while the jobs the were working on as at that time remained almost unchanged. The remained workers after the black death demanded for rise in wages, although the lords stood against the demand.

Explanation:

Although worker population decreased because of the plague, the amount of land and the tools did not change much. Some farm animals died when the people who took care of them died. Because the remaining workers had more tools and land to work, they became more productive, producing more goods and services. When workers are more productive, employers are willing to pay higher wages. The Statute of Laborers and similar laws in other countries were not very effective. Some lords avoided violating the statute by making “in kind” pay-ments—paying workers with food or other goods rather than wages—or providing other “fringe benefi ts.” Some lords began to pay illegally high wages. Wages increased because there were fewer workers—labor had become more scarce

8 0
3 years ago
What is the meaning of delegation?
andrezito [222]
The meaning of delegeation is ''<span>the act of empowering to act for another''.</span>
3 0
4 years ago
Read 2 more answers
What do goods like gasoline, tobacco, and alcohol typically share in common?
SashulF [63]
The answer would have to be a
7 0
3 years ago
Read 2 more answers
_____ is the strategy of preserving market share so that an organization can take advantage of very positive cash flow.
stira [4]
<span>This would be holding. By taking this tactic, the company is trying to stay where it is at and reap the benefits that they have earned thus far, without trying to take any unnecessary chances that might put their cash flow and profitability at risk.</span>
8 0
4 years ago
Situation: C’est Wot is a Quebecois-British fusion restaurant specializing in jellied eel poutine. To encourage customers to bri
Andreas93 [3]

C’est Wot is a Quebecois-British fusion restaurant specializing in jellied eel poutine. To encourage customers to bring their friends, C’est Wot gives first-time visitors buy-one-get-one meal vouchers for their next visit. This is an example of: adding force.

<h3>What is an adding force in business?</h3>

This is the term that is used to describe the way that a company is able to get consumers that would get to purchase and consume their products. It is a strategy that is used to facilitate increased consumer base.

The way this is seen here is that the business had to create a system that would bring them more people. To do this they had to create a way for people to come in pairs.

The first time visitors are given a voucher that would enable them to get free meals when they visit.

Read more on business strategy here:

brainly.com/question/25640993

#SPJ1

3 0
2 years ago
Other questions:
  • Last year Anderson Corporation reported a cost of goods sold of $101,000. The company's inventory at the beginning of the year w
    5·1 answer
  • What was the effort to increase the world's food supply by using modern agricultural techniques called?
    7·1 answer
  • Bressette Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $ 6.20 Direct labor
    6·1 answer
  • Racketeering is defined as:
    11·1 answer
  • Which investment type typically carries the least risk A- individual stocks B- treasury bonds C- savings account D- mutual funds
    13·2 answers
  • You have determined the following data for a given bond: Real risk-free rate (r*) = 3%; inflation premium = 8%; default risk pre
    8·1 answer
  • Which of the following most accurately describes an​ annuity? A. a series of unequal cash payments made at equal time intervals
    15·1 answer
  • Which of the following statements is true? In market equilibrium:
    8·1 answer
  • An asset was purchased for $100,000 on January 1, Year 1 and originally estimated to have a useful life of 12 years with a resid
    10·1 answer
  • Which is not a way you can check your account balance?
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!