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ser-zykov [4K]
2 years ago
15

Vanguard has an overall (composite) WACC of 10%, which reflects the cost of capital for its average asset. Its assets vary widel

y in risk, and Vanguard evaluates low-risk projects with a WACC of 8%, average-risk projects at 10%, and high-risk projects at 12%. The company is considering the following projects:Col1 Project A B C DCol2 Risk High Average High Low Col3 Expected Return 15% 12% 11% 9%Which set of projects would maximize shareholder wealth?
Business
1 answer:
Svetradugi [14.3K]2 years ago
8 0

Answer:

The projects which maximize Vanguard's shareholder wealth are Project A; Project B; Project D.

Explanation:

Projects which maximize the shareholder value are projects delivering Expected Returns which are higher than its risk-adjusted weighted average cost of capital (WACC).

As a result, Project A with Expected return of 15% and risk adjusted WACC of 12%; Project B with Expected return of 12% and risk adjusted WACC of 10%; Project D with Expected return of 9% and risk adjusted WACC of 8%; are the projects that maximize the shareholder's value.

On the other hand, Project C with Expected return of 11% and risk adjusted WACC of 12% is harmful to shareholder value.

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The number of new domestic wind turbine generators installed each year in a particular country has been forecast to increase at
kirza4 [7]

Answer:

2030

Explanation:

The computation of the total number of new generators including this year is shown below

Given that

(A) = 100

Common Ratio (r) = 1.15

n = 10

Now

Sum of 10 terms Sn is

= A × (r n - 1) ÷ (r - 1)

= 100 × (1.1510 - 1) ÷ (1.15 - 1)

= 100 × 3.0456 ÷ 0.15

= 2030

We simply applied the above formula so that the total number of new generators could come

5 0
2 years ago
(Prepared from a situation suggested by Professor John W. Hardy.) Lone Star Meat Packers is a major processor of beef and other
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Answer:

Instructions are listed below.

Explanation:

Giving the following information:

1 Pound T-bone:

Selling price ($7.95 per pound) $ 7.95

Joint costs= $3.80

Profit per pound $ 4.15

Further process:

It costs $0.55 to further process one T-bone steak.

6-ounce filet mignon and one 8-ounce New York cut.

The filet mignon can be sold for $12.00 per pound, and the New York cut can be sold for $8.80 per pound.

A) Filet mignon: $12.00 pound

1 ounce= 16 ounce

0.375= 6 ounce

Price= 0.375*12= $4.5

New York cut= $8.80 a pound

Price= 0.5*8.80= $4.4

Sales= 4.5+4.4= $8.9

Costs= 3.80 + 0.55= 4.35

Profit= $4.55

B) It is more profitable to further process the T-bone stake by $0.40.

7 0
2 years ago
As companies shift from a product-centric focus to a customer-centric focus, a myth that almost all current customers are profit
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Answer:

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5 0
2 years ago
What occurs over time as a result of inflation? Check all that apply.
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Answer:A

B

D

Explanation:

3 0
2 years ago
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Suppose that Ford issues a coupon bonds at a price of $1,000, which is the same as the bond's par value. Assume the bond has a c
uysha [10]

Answer:

YTM approximated 4.08%

Explanation:

If the price of the bond changes to 1,060

we will need to calcualte the YTM

we could do it with an approxmation method like this:

YTM = \frac{C + \frac{F-P}{n }}{\frac{F+P}{2}}

Cuopon payment =1,000 x 4.5% = 45

Face value       = 1,000

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n= 20 years

quotient 4.0776699%

It will yield approximately 4.08%

3 0
2 years ago
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