The correct option is C (1836)
<u>Explanation:</u>
From the given data, all the frims with the given market share are taken. the 8 more firms are taken into account which have 1 percent market share. Thsu, 8 is multiplied with 1 pecent of share.
All the square roots are calculated in order to calculate the HHI
HHI = Summation of sqrt Si
= (36)^2 + (3)^2 + (3)^2 + (6)^2 + (16)^2 + (6)^2 + (4)^2 + (7)^2 + (11)^2 + 8(1)^2
= 1836
Therefore, the correct answer is C (1832)
Answer:
8.37%
Explanation:
WACC = [E / (D + E)](Re) + [D / (D + E)](Rd)(1 - T)
E = market value of equity
D = market value of debt
Re = cost of equity
Rd = cost of debt
T = taxes
- E = 3,000,000 common stocks x $50 = $150,000,000
- DP = 1,000,000 preferred stock x $33 = $33,000,000
- DB = 80,000 bonds x $1,080 = $86,400,000
- Re = (dividend / stock price) + growth rate = ($2.4 / $50) + 6% = 0.048 + 6% = 0.108 or 10.8%
- Rdp = $2.70 / $33 = 8.18%
- Rdb = $85 / $1,080 = 7.87%
- T = 33%
WACC = [E / (D + E)](Re) + [DP / (D + E)](Rdp)(1 - T) + [DB / (D + E)](Rdb)(1 - T)
since the numbers are too large, I will divide the calculation into three parts:
- [E / (D + E)](Re) = [$150,000,000 / ($119,400,000 + $150,000,000)](10.8%) = ($150,000,000 / $269,400,000) x 10.8% = 0.5568 x 10.8% = 0.0601 or 6.01%
- [DP / (D + E)](Rdp)(1 - T) = ($33,000,000 / $269,400,000) x 8.18% x (1 - 33%) = 0.1225 x 8.18% x 67% = 0.0067 or 0.67%
- [DB / (D + E)](Rdb)(1 - T) = ($86,400,000 / $269,400,000) x 7.87% x 67% = 0.0169 or 1.69%
WACC = 6.01% + 0.67% + 1.69% = 8.37%
Answer:
The pric eof the stock today us $77.12
Explanation:
The two stage dividend growth model of DDM will be used to calculate the price of the stock today. The formula for two stage growth model is:
Price today = D1 / (1+r) + D2 / (1+r)^2 + ... + [(Dn / r - g) / (1+r)^n]
Price today = 3 / (1+0.06) + + 3 * (1+0.05) / (1+0.06)^2 + [(3 * (1+0.05) * (1+0.02) / 0.06 - 0.02) / (1+0.06)^2]
Price today = $77.12
Answer & Explanation:
Straight Line table
<em><u>The straight-line Method</u></em> is simply and easy to understand, It distribute the depreciation equally between years. So that implies that the formula should be:
195,000 - 9,000 = 181,000
181,000 / 4 = 45,250
Double Declining table
<em><u>The Double declining </u></em>You double the straight line rate
Current Book Value x rate = depreciation expense
190,000 x 1/2 = 95,000
Socio economic groups refers to a person's position in society's structural and functional systems. For social and economics groups to form you have to base everything off a person's data on the person's main type of activity, occupation, occupational status and industry.