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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%.

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Answer:c. 12.0%

Explanation:Return on Investment (ROI) is a measure used by firms in order to determine how effective an investment is in terms of gains from its proceeds when compared to the amount invested .

Given

Yellowday Energy margin as 3%

turnover= 4.0 and sales as $50million,

we can calculate the ROI,Return on Investment , as the Profit margin multiplied by turnover

ROI = Profit Margin  x Turnover

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     =0.12

0.12 x 100

= 12.0%  

4 0
3 years ago
Short Answer 7: If the government announced that they were going to reduce the income tax next year, financed by finding a large
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Answer:

The labor would increase

Explanation:

When the government decides to lower the income tax in the coming year, which is financed by the findings of a large as well as a previously unknown warehouse for real goods, then there would be an increase in the labor as the reduction in the income tax would cause more and more investment. And thus organizations and firms increase their efficiencies and create more and more output by increasing the labor.

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A researcher measures driving distance from college and weekly cost of gas for a group of commuting college students. What kind
Elena-2011 [213]

Answer:

The correct answer is: a positive correlation.

Explanation:

Correlation can say something about the relationship between variables. It is used to understand:

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2. The strength of the relationship.

Correlation is a powerful tool that provides vital pieces of information.

In the case of family income and family spending, it is easy to see that both rise or fall together in the same direction. This is called a positive correlation.

In the case of price and demand, the change occurs in the opposite direction, so that the increase in one is accompanied by a decrease in the other. This is known as a negative correlation.

8 0
3 years ago
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Therefore would be the overall margin on the order is $86.87

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