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Masteriza [31]
3 years ago
15

Suppose that Rearden Metal currently has no debt and has an equity cost of capital of 12%. Rearden is considering borrowing fund

s at a cost of 6% and using these funds to repurchase existing shares of stock. Assume perfect capital markets. If Taggart borrows until they achieved a debt -to-equity ratio of 50%, then Rearden's levered cost of equity would be closest to:A) 10.0%B) 12.0%C) 15.0%D) 16.0%
Business
1 answer:
Alexxandr [17]3 years ago
4 0

Answer:

Option (C) is correct.

Explanation:

We have to use MM proposition that cost of equity will change itself in such a manner so that it can take care of its debt.

Cost of equity:

= WACC of all equity firm + (WACC of all equity - Cost of debt ) × (Debt -to-equity ratio)

At the beginning, when there was no debt,

WACC = cost of equity = 12 %

Levered cost of equity:

= 12% + ( 12% - 6%) × 0.5

= 15%

Therefore, Rearden's levered cost of equity would be closest to 15%.

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Answer:

A. The existence of a religious life

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The creatures which are half-animal and half-human or have features from animal ofter represent goods(Seth, Tiamat) or sons of goods (Horus)

They are described with qualities above normal human, like a good ability o see which is depicted as having the head of a falcon (Horus)

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3 0
3 years ago
On June 10, Sheridan Company purchased $7,700 of merchandise from Crane Company, terms 3/10, n/30. Sheridan Company pays the fre
sveta [45]

Answer:

Sheridan Company journal entries:

June 10

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4 0
3 years ago
If total spending rises from one year to the next, then Select one: a. either the economy must be producing a larger output of g
DIA [1.3K]

Answer:

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Total Spending = Price of goods,services x Quantity of goods,services

So, if the total spending increases : It implies that either the quantity of goods & services, or their prices, or both have increased. As, amount spent is a product of both of them.

8 0
3 years ago
A registered representative receives a telephone call from a customer who tells the representative to: "Sell my 500 shares of AB
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Explanation:

8 0
3 years ago
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Answer:

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Reliability can be estimated by comparing different versions of the same measurement. Validity is harder to assess, but it can be estimated by comparing the results to other relevant data or theory.

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Students arrange information hierarchically, cate- gorically, sequentially, or in other ways. They discover and depict the overall structure of the material as well as how discrete pieces of information fit together. They organize and reorganize generalizations, principles, concepts, and facts.

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Chronological Patterns. Sequential Patterns. Spatial Patterns. Compare-Contrast Patterns. Advantages- Disadvantages Patterns. Cause-Effect Patterns. Problem-Solution Patterns. Topical Patterns.

What does it mean to analyze information?

Information analysis is the systematic process of discovering and interpreting information.

What is the benefit of analyzing information?

Analysis is the process of breaking a complex topic or substance into smaller parts in order to gain a better understanding of it. The technique has been applied in the study of mathematics and logic since before Aristotle (384–322 B.C.), though analysis as a formal concept is a relatively recent development.

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Before analyzing data, it is important to first clearly understand for whom and for what purpose you are conducting the analysis. ... Therefore, conducting the analysis to produce the best results for the decisions to be made is an important part of the process, as is appropriately presenting the results.

now i hope this helps you

3 0
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