Answer:
9.09%
9.327%
Explanation:
For computing the weighted cost of capital first we have to determine the cost of preferred stock, cost of common stock and the after cost of debt is shown below:
The Cost of preferred stock is
= Preferred dividend ÷ market price of preferred stock
= $2.50 ÷ $25
= 10%
The cost of common stock is
= (Expected dividend ÷ market price) + growth rate
= ($1.50 ÷ $20) + 0.05
= 12.50%
And, the after cost of debt is
= Before cost of debt × (1 - tax rate)
= 0.08 × (1 - 0.35)
= 5.2%
Now the WACC is
= Weightage of debt × cost of debt + (Weightage of preferred stock) × (cost of preferred stock) + (Weightage of common stock) × (cost of common stock)
= (0.45 × 5.2%) + (0.05 × 10%) + (0.50 × 12.5%)
= 2.34 + 0.5 + 6.25
= 9.09%
In the second case, the WACC is
= Weightage of debt × cost of debt + (Weightage of preferred stock) × (cost of preferred stock) + (Weightage of common stock) × (cost of common stock)
= (0.30 × 5.2%) + (0.05 × 10%) + (0.65 × 12.5%)
= 0.702 + 0.5 + 8.125
= 9.327%
Answer:
c) This is not plagiarism
Explanation:
Since the student version adequately referenced the source, this is not a example of plagiarism. The student version started with the naming of the source and followed with the key takeaways from their elaboration. Additionally, the student version provided a brief, conclusion to the problem, which is the added scientific value to pure referencing.
Answer:
nominal, real, & the classical dichotomy
Explanation:
A nominal variable is a value whose values are non-numeric for example gender. It is calculated based on the current – year prices.
In other words, nominal value is calculated in monetary terms, whereas real value is measured on the basis of goods or services
A real variable is a variable whose values are numeric. It is measured based on the currency of the base year.
The distinction between real variables and nominal variables is known as <u>nominal, real, & the classical dichotomy</u>.
The Classical Dichotomy is based on the assumption that states that in the long run, the nominal economy and the real economy are completely separated from each other. In the long run, nominal prices have no impacts on real variables.
Answer
Windsor, Inc
Income Statement (Partial)
For the year October 31, 2022
Revenue
Sales $908,100
Less: Sales return and allowance $19,800
Sales Discount <u>$14,500</u>
<u>$34,300</u>
Net Sales <u>$837,800</u>
Large companies such as Walmart, IBM, and Ford are classified as C Corporations. C Corporations offer liability protection for their shareholders. Each shareholder is only financially liable for the amount he has invested in the company. I<span>ts profits are taxed separately from its owners under sub chapter </span>C<span> of the Internal Revenue Code.</span>
