The plaintiff in a criminal case is the government/district attorney. True False

Malkin corp. has no debt but can borrow at 8.75 percent. the firm’s wacc is currently 16 percent, and there is no corporate tax.

Artyom0805 [142]

Answer:

a.

16%

b.

17.3%

c.

23.25%

d.

16%

Explanation:

WACC is the average cost of capital of the firm based on the weightage of the debt and weightage of the equity multiplied to their respective costs.

As have the cost of capital, we need to calculate the cost of equity.

Cost of Capital = (Cost of Equity x Weightage of equity) + (Cost of Debt x Weightage of Debt)

a.

No Debt

16% = (Cost of Equity x 1 ) + (8.75% x 0)

16% = Cost of Equity + 0

Cost of Equity = 16%

b.

15% Debt and Equity is 85% (100%-15%)

16% = (Cost of Equity x 85% ) + (8.75% x 15%)

0.16 = (Cost of Equity x 0.85) + 0.013125

0.16 - 0.013125 = Cost of Equity x 0.85

0.146875 = Cost of Equity x 0.85

Cost of Equity = 0.146875 / 0.85 = 0.17279

Cost of Equity = 17.3%

c.

50% Debt and Equity is 50% (100%-50%)

16% = (Cost of Equity x 50% ) + (8.75% x 50%)

0.16 = (Cost of Equity x 0.50) + 0.04375

0.16 - 0.04375 = Cost of Equity x 0.50

0.11625 = Cost of Equity x 0.50

Cost of Equity = 0.11625 / 0.50 = 0.2325

Cost of Equity = 23.25%

d.

WACC for b and c are 16%

7 0

2 years ago

Read 2 more answers

Interest rates on 4-year Treasury securities are currently 5.4%, while 6-year Treasury securities yield 7.65%. If the pure expec

Fudgin [204]

Answer:

12.3%

Explanation:

In this question, we are asked to calculate what is believed a 2-year market security will be yielding, 4 years from now

To calculate this, we proceed mathematically;

2 year yield 4 years from now = [ ( 1 + 0.0765)^6 / ( 1 + 0.054)^4]^1/2 - 1

2 year yield 4 years from now = [ 1.5563 / 1.2341]^1/2 - 1 = 0.123

2 year yield 4 years from now = 0.123

2 year yield 4 years from now = 12.3%

8 0

2 years ago

helene, corp. reports a net operating loss in year 1 of $20,000. in year 2, the company reports income of $10,000. what amount o

gtnhenbr [62]

$8,000 (80% limitation) amount of year 2 income may be offset by the carryforward of the year 1 net operating loss

When a business' running costs are higher than its gross income, it experiences an operating loss (or revenues in the case of a service-oriented company).

Operating profit is the profit a business makes before taxes and interest. In the same manner as cost of goods sold, selling, general, and administrative expenditures are, interest and taxes are not regarded as operating costs. In many cases, businesses make enough money to pay their costs and turn a profit.

To know more about operating refer here:

brainly.com/question/15080057

#SPJ4

3 0

4 months ago

The process of setting aside money and putting it to work by having it earn interest or dividends or gain value in the equities

Kisachek [45]

Answer:

Saving and investing.

Explanation:

Savings is basically putting aside current money for future use. Investing is committing money to make profit over period of time.

4 0

3 years ago

Universal Foods issued 10% bonds, dated January 1, with a face amount of $260 million on January 1, 2018. The bonds mature on De

kondaur [170]

Answer:

The bonds were issued at $220,879,628.13

This is lower than the face value to compensate for the lower coupon payment.

cash 220,879,628.13 debit

discount on BP 39,120,371.87 debit

bonds payable 260,000,000 credit

--to record the issuance of the bonds--

Interest expense 13,252,777.69 debit

Discoun on BP 252,777.69 credit

cash 13,000,000 credit

--to record the first interest payment--

Interest expense 13,267,944.35 debit

Discount on BP 267,944.35 credit

Cash 13,000,000 credit

--to record second interest payment--

Interest expense 13,539,156.67 debit

Discount on BP 539,156.67 credit

cash 13,000,000.00 credit

--to record Dec 31st, 2025 payment--

Explanation:

To determinate the price we will solve for the present value of the coupon payment and maturity at the market rate of %12

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

Coupon payment:

260,000,000 x 10% x 1/2 =13,000,000.000

time 20 years x 2 payment per year 40

yield to maturity 12% / 2 = 6%

$13000000 \times \frac{1-(1+0.06)^{-40} }{0.06} = PV\\$

PV $195,601,859.3298

$\frac{Maturity}{(1 + rate)^{time} } = PV$

Maturity 260,000,000.00

time 40.00

rate 0.06

$\frac{260000000}{(1 + 0.06)^{40} } = PV$

PV 25,277,768.80

PV c $195,601,859.3298

PV m $25,277,768.8042

Total $220,879,628.1340

For the journal entries, we will multiply this current market price of the bonds by the market rate (YTM) the difference between this and the actual cash obligation generate by the bond is the amortization of the discount.

first interest payment

$220,879,628.13 x 6% = 13,252,777.69

less actual cash outlay: 13,000,000

amortization 252,777.69

second interest payment

($220,879,628.13- $252,777.69) x 6% = 13,267,944.35

less actual cash outlay: 13,000,000.00

amortization 267,944.35

December 31st, 2025:

This will be payment 14th

after building the schedule until that date we got:

8 0

2 years ago