Answer:
Cost of equity is 11.2%
WACC is 8.74%
Explanation:
The formula for cost of equity is given below:
Cost of equity=risk free rate+(Beta *risk premium)
risk free rate is the treasury bill rate of 4%
Beta is 0.9
market risk premium is 8%
cost of equity=4%+(0.9*8%)=11.2%
WACC=Ke*E/V+Kd*D/V*(1-t)
Ke is the cost of equity of 11.2%
Kd is the cost of debt of 5%
t is the tax rate of 40% or 0.4
E is the equity weighting of 70% or 0.7
D is the debt weighting of 30% or 0.3
V is the E+D=0.7+0.3=1
WACC=11.20%
*0.7/1+(5%*0.3/1*(1-0.4)
WACC=7.84%
+0.90%
=8.74%
Answer: A. Camry
Explanation:
Toyota's quality problems in the United States were signaled with a recall in late 2009 for problems with floor mats, but they didn't end there. Since then, more than 20 million cars have been recalled
Increasingly, evidence suggests that Toyota's culture—or even the cars it produces—is not the source of the problem. A 2011 report released by the U.S. National Highway Traffic Safety Administration (NHTSA) concluded that unintended acceleration was not caused by problems in the electronic circuitry.
Answer:
<u>Not buying the Asics or the Nike shoes</u>.
Explanation:
Opportunity cost is an economic expression that refers to alternative buying opportunity decisions that have been waived for another opportunity to apply economic resources to be completed. What influences the opportunity cost is the desire for the acquisition, in the case of Diana she had first choice to buy Adidas shoes, followed by Nike and Asics that could cost a lower amount than she paid in the chosen tennis, but not they had the same added benefits that Diana expected when choosing a good as a first call option.
Answer:
Mandy Capital Debit: 100,000
Brittney Capital Credit: 100,000
Explanation:
The journal entry will be recorded as above. Mandy sold equity worth $100,000, so we will record the entry on transfer of equity by the equity value sold. Now, for this equity value both partners can decide the amount in which one will sell to other, which in this scenario is $85,000.
Answer:
B False
Explanation:
Modified Internal Rate of Return(MIRR) is computed using the following steps:
- Compute the discounted cash flows.
- Sum all discounted cash flows to generate net present value (NPV).
- Compute IRR from NPV.
