Answer:
Cost of debt (Kd) = 6.1%
Cost of preferred stock = <u>Dividend paid</u>
Current market price
= $2.53
$33
= 0.0767 = 7.67%
Risk-free rate (Rf) = 2.2%
Beta (β) = 1.11
Market risk premium (Rm - Rf) = 6.7%
Cost of equity (Ke) = Rf +β(Rm - Rf)
Cost of equity (Ke) = 2.2 + 1.11(6.7)
Cost of equity (Ke) = 9.637%
WACC = Kd(D/V)(1-T) + Kp(P/V) + Ke(E/v)
WACC = 6.1(39 /100)(1 -0.35) + 7.67(11/100) + 9.637(50/100)
WACC = 1.55 + 0.84 + 4.82
WACC = 7.21%
Explanation:
In this case, cost of debt has been given. Cost of preferred stock is calculated as current dividend paid divided by current market price.
Cost of equity is calculated based on capital asset pricing model, which is Risk-free rate plus beta multiplied by the market risk premium.
WACC equals after-tax cost of debt multiplied by the proportion of debt in the capital structure plus cost of preferred stock multiplied by the proportion of preferred stock in the capital structure plus cost of equity multiplied by proportion of equity in the capital structure.
Answer:
net income 4,385
Explanation:
The income statment will only include revenues and expenses account.
A revenue will be the gain realized from the business main activity or secondary like interst or rental revenues.
While expenses will be the cash erogation or losses iincurred in the business activities, their financing like interest expenses and other.
revenues 9,850
expenses <u> 5,465 </u>
net income 4,385
The loan is not an expense. It wil lbe the interest it generated but we aren't given with that information
The dividends also aren't an expense they represent the return to the investors.
Answer:
Break-even point (dollars)= $772,500
Explanation:
Giving the following information:
The contribution margin ratio of Donath Corporation's only product is 64%. The company's monthly fixed expense is $454,200 and the company's monthly target profit is $40,200.
To calculate the sales in dollars to obtain the desired profit, we need to use the following formula:
Break-even point (dollars)= (fixed costs + desired profit)/ contribution margin ratio
Break-even point (dollars)= (454,200 + 40,200) / 0.64
Break-even point (dollars)= $772,500
No definitely not
Is this an assessment question?
Answer:
Revenue Expenses in net income
Gain / losses in Other comprehensive income
Explanation:
Revenue and Expenses of an entity is reported in the net income section of income statement. the second section of income statement deals with unrealized gains / losses and any gain or losses from discontinuing operations as well. Net income also added to the other comprehensive income to calculate total net income or total comprehensive income.
