Answer:
Ke = D1/Po(1-F) + g
Ke = $0.65/17(1-0.1) + 0.06
Ke = 0.0425 + 0.06
ke = 0.1025 = 10.25%
WACC = Ke(E/V) + Kd(D/V)(1-T)
WACC = 10.25(55/100) + 7.75(45/100)(1-0.4)
WACC = 5.6375 + 2.0925
WACC = 7.73%
Explanation:
In this case, there is need to calculate cost of equity in the light of floatation cost using the above formula. Thus, we will now calculate WACC by considering cost of equity and the proportion of equity in the capital structure plus after-tax cost of debt and the proportion of debt in the capital structure.
Answer:
A. $162,500
B. $17,500
Explanation:
Data
EBIT = $25,000
Tax rate = T = 35%
Discount Rate = r = 10%
Requirement A: Market Value
The Market value of the firm can be calculated by using the following formula
Market Value = 
Market Value = 
Market Value = $162,500
Requirement B: Total value of firm If issues $50,000 of debt paying 6% interest
The market value of the firm increases by the present value of the Interest tax shield
The present value of tax shield = Amount of debt x Tax Rate
The present value of tax shield = $50,000 x 35%
The present value of tax shield = $17,500
The market value of the firm will be increased by $17,500
Answer:
d. They coordinate dosely with suppliers and service providers to reduce customer wait times.
Explanation:
Companies that use agile style of operations focus on incremental delivery of service, continual planning, team collaboration, and continuous learning.
This gives the company the ability of responding quickly to market changes by coordinating closely with suppliers and service providers to reduce customer wait times.
Clothes Unlimited is an example of an agile company that integrates agility into their supply chains. The company employs regular small-batch deliveries to all of its stores twice a week and uses real-time data to assess customer preferences
Answer:
<u>d) objective research</u>
<u>Explanation:</u>
We need to note that mention was made that the research was "<em>Carefully controlled." </em>Been carefully controlled shows that the research has an objective.
Furthermore, measuring the reactions of consumers at different salt levels makes the research factual and thus a decision could be made from the findings.
Answer:
$69,300
Explanation:
Given the following :
House A :
Sales price = $70,000
Monthly rent = $500
GRM = 140
House B :
Sales price = $68,500
Monthly rent = $490
GRM = 139.8
House C :
Sales price = $70,500
Monthly rent = $485
GRM = 139.6
The gross rent multiplier GRM is obtained as the proportion of the sale price of a property to it's monthly rent.
GRM = (Sales price / monthly rent)
If a property is rented for 495 and house A is the
most comparable, then
Sales price will be closest to:
GRM of House A × monthly rent of property
140 × $495 = $69,300
