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
Answer:
None
Explanation:
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The answer is recency. This part of the RFM model. It is a marketing investigation tool used to classify a firm's best customers by calculating definite factors.
The RFM model is founded on three quantitative factors which are:
Recency - How recently a customer has made an acquisition or purchase of productFrequency – How frequent or often a customer makes a purchaseMonetary Value - How much cash a customer spends on purchases
RFM analysis often sustains the marketing saying that "80% of business comes from 20% of the customers."
Griffin should report the recurring problem to employees via explanatory email that demonstrates the importance of meetings for organizational effectiveness. Create alternative methods of speech at meetings. Decrease meeting times when possible and focus on the most relevant points. Establish overtime socializing warning policies.
