Creating a customer profile helps identify markets because the information on it is too persuade the buyer, customer or Purchaser. I'm in 6th grade don't judge x
Answer:
17%
Explanation:
To calculate this, we use the weighted average cost of capital (WACC) as follows:
Total capital = 15 + 5 = 20
Weight of equity = 15/20 = 0.75, or 75%
Weight of debt = 5/20 = 0.25, or 25%
WACC = (20% × 75%) + (8% × 25%) = 17%
Therefore, the company's cost of capital is 17%.
Answer:
the use of supply chain partners to provide products or services.
Explanation:
In Business management, outsourcing can be defined as a process which involves an agreement between two companies that allows for the provision of services or job functions by another.
When a company is outsourced, it engages the service of another company (third-party) to perform some of its duties rather than the use of an in-house department or employees to handle them. The outsourcing firm is saddled with the responsibility of physically distributing the goods or services of the outsourced company.
Hence, outsourcing refers to the use of supply chain partners to provide products or services.
Answer:
cost of common equity = 14.46%
WACC = 11.29%
accept = Project A
Explanation:
Cost of common equity is the return that is required by Holders of Common Stock.
The available details can be used to calculate the cost of common equity using the Dividend Growth Model as follows :
Cost of common equity = (Next year`s Dividend / Current Market Price of a Stock) + Expected Growth
= ($2.20/$26)+6%
= 14.46%
WACC is the minimum return that a project must offer before it can be accepted.It shows the risk of the company.
Cost of Debt = Market Interest Rate × (1 - tax rate)
= 9.00% × (1-0.40)
= 5.40%
Capital Source Weight Cost Total
Debt 35% 5.40% 1.89%
Common Equity 65% 14.46% 9.40%
Total 100% 19.86% 11.29%
Therefore WACC is 11.29%
When evaluating projects, Compare the Project`s Internal Rate of Return (IRR) to the WACC.
<u>Project A</u>
IRR 12% > WACC 11.29%
Therefore Accept
<u>Project B/S</u>
IRR 11% < WACC 11.29%
Therefore Do Not Accept
