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
ale4655 [162]
2 years ago
5

Wilde Software Development has a 12% unlevered cost of equity. Wilde forecasts the following interest expenses, which are expect

ed to grow at a constant 3% rate after Year 3. Wilde's tax rate is 25%. Year 1 Year 2 Year 3 Interest expenses $80 $95 $140 What is the horizon value of the interest tax shield
Business
1 answer:
raketka [301]2 years ago
6 0

Answer: $400.56

Explanation:

Horizon value = Tax shield in 3rd year * (1 + growth rate) / (Required return - Growth rate)

Tax shield in year 3 = Interest expense * tax rate

= 140 * 25%

= $35

Horizon value = 35 * ( 1 + 3%) / (12% - 3%)

= $400.56

You might be interested in
Winter's Toyland has a debt-equity ratio of .57. The pretax cost of debt is 8.2 percent and the required return on assets is 14.
True [87]

Answer:

<em>WACC 10.995</em>

Explanation:

We solve using the Weighted average cost of capital assuming a tax rate of 0% as we have to ignore taxes. Hence, we get:

WACC = K_e(\frac{E}{E+D}) + K_d(1-t)(\frac{D}{E+D})

Ke 0.14700

Equity weight 0.43

Kd 0.082

Debt Weight 0.57

t 0

WACC = 0.147(0.43) + 0.082(1-0)(0.57)

WACC 10.99500%

6 0
3 years ago
Read 2 more answers
Harry recently raised his employees' wages, which has increased production costs. Which factor did the salary hike affect?
Pavel [41]
The factor that the salary hike effect is :
A. Fixed cost
Technically, no matter how much output the workers produced, the wages will stay the same

hope this helps
6 0
3 years ago
Read 2 more answers
What is the most important component in planning a special event as a way to both advocate for your programs and raise funds?
marysya [2.9K]
I think the answer is Strong leadership, because you can’t have a good event without the right evader
8 0
3 years ago
As rationing mechanisms, prices options: a. are efficient, but long lines are inefficient. b. and long lines are inefficient. c.
valentina_108 [34]

Answer:

a. are efficient, but long lines are inefficient

Explanation:

A rationing mechanism is a system in which who gets how many goods during a shortage is carefully chosen, in order to do these long lines are used even though they are inefficient.

I hope you find this information useful and interesting! Good luck!

4 0
2 years ago
The ___________ is the primary agency responsible for drawing up the budget.
aleksley [76]

<span>The government is the primary agency responsible for drawing up the budget.

</span>Government<span> is the means by which state policy is enforced, as well as the mechanism for determining the policy of the state. Forms of </span>government<span>, or forms of state governance, refers to the set of political systems and institutions that make up the organization of a specific </span>government<span>.</span>

7 0
2 years ago
Other questions:
  • Firms subject to the reporting requirements of the Securities Exchange Act of 1934 are required by the Foreign Corrupt Practices
    11·1 answer
  • Within the context of Jennifer Aaker's analysis, identify the brand personality that can be associated with a new product whose
    14·1 answer
  • Teton Trails manufactures backpacks for adventurers. The backpacks come in two types: Daytripper, and Excursion. Teton anticipat
    13·1 answer
  • Jackson Company uses a perpetual inventory system. On November 30, it purchased $10,000 of merchandise and it must pay the $200
    11·1 answer
  • A limitation of using past performance as a basis for judging actual results is that​ ________. A. future conditions can be diff
    15·1 answer
  • When experiences are insufficient and the risk of making a wrong decision i high, a consumer is more likely to use _____________
    13·2 answers
  • Alex's Furniture Mart produces and sells tables in a perfectly competitive market. When Alex's Furniture Mart produces and sells
    8·1 answer
  • Calculate the following financial ratios for Phone Corporation: (Use 365 days in a year. Do not round intermediate calculations.
    6·1 answer
  • Kamal reproduces Lorena’s copyrighted work "Musica" without paying royalties. Kamal is most likely excepted from liability for c
    12·1 answer
  • The Capitalist Mutual Fund's portfolio is valued at $77.7 million. The fund has liabilities of $5.5 million, and the investment
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!