Answer and Explanation:
The computation is shown below:
Debt = D ÷ (E + D)
= 0.8 ÷ (1 + 0.8)
= 0.4444
Now
Weight of equity = 1 - Debt
= 1 - 0.4444
= 0.5556
As per Dividend discount model
Price = Dividend in 1 year ÷ (cost of equity - growth rate)
40 = $2 ÷ (Cost of equity - 0.06)
Cost of equity = 11%
Cost of debt
K = N
Let us assume the par value be $1,000
Bond Price =∑ [(Annual Coupon) ÷ (1 + YTM)^k] + Par value ÷ (1 + YTM)^N
k=1
K =25
$804 =∑ [(7 × $1000 ÷ 100)/(1 + YTM ÷ 100)^k] + $1000 ÷ (1 + YTM ÷ 100)^25
k=1
YTM = 9
After tax cost of debt = cost of debt × (1 - tax rate)
= 9 × (1 - 0.21)
= 7.11
WACC = after tax cost of debt × W(D) + cost of equity ×W(E)
= 7.11 × 0.4444 + 11 × 0.5556
= 9.27%
As we can see that the WACC is lower than the return so it should be undertake the expansion
Changing the prices of products based on the level of demand characteristics of the customer is called dynamic pricing.
Personalization is the use of customer data to create or modify items to meet individual needs. Customization is the manual modification of an item by a customer to meet their needs and requirements. Content streaming services are perhaps the most famous example of the subscription business model.
Internet technology reduces demand information costs by enabling price transparency (making it easier for consumers to find different prices) and cost transparency (making it easier for consumers to see the true cost of a product). and improve information quality.
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Answer:
The choice between consumption in the present and consumption in the future, perception of a close correlation between current income and consumption, and the smoothing of consumption over time as deriving from its comparison to the income which the individual would perceive as his/her permanent income.
Answer:
b. Intellectual property
Explanation:
Toyota is investing in Uber a car hailing service company.
Uber has cutting edge technology that makes it stand out from other car hailing services.
Toyota wants to have a part of this technology in order to improve on their cars and make them stand the test of time with regards to customer satisfaction.
To do this Toyota invested $500 million in Uber and in exchange they have access to Uber's intellectual property.
