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seropon [69]
1 year ago
5

Protec Company, whose target capital structure is 40% debt, 15% preferred, and 45% common equity. The after-tax cost of debt is

5.00%, the cost of preferred is 7.0%, and the cost of retained earnings is 11.50%. The firm will not be issuing any new stock. What is its WACC? 6.75% 7.18% 7.64% 7.93% 8.23%
Business
1 answer:
taurus [48]1 year ago
3 0

Answer:

The correct answer is 8.23%.

Explanation:

According to the scenario, the computation can be done as:

WACC of debt = Respective costs of debt× Respective weight of debt

= (0.4 × 5)

= 2

WACC of preferred = Respective costs of preferred × Respective weight of preferred

= (0.15 × 7)

= 1.05

WACC of common equity = Respective costs of common equity × Respective weight of retained earning

= (0.45 × 11.5)

= 5.175

So, Total WACC = WACC of debt + WACC of preferred + WACC of common equity

= 2 + 1.05 + 5.175

= 8.225 or 8.23 (approx.)

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OverLord2011 [107]

Answer:

Should have had Martha negotiate the logistics of the financial deal then have Samuel come up with the strategy plan

Explanation:

Samuel is quality control so he would know how to come up with a plan to best fit customer and company need assuring that both parties get the most out of the exchange and or business agreement

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2 years ago
U.S. company buys inventory from a supplier in Canada and pays for the inventory in Canadian dollars (C$). The inventory is conv
nataly862011 [7]

Answer:

A. The rate when the inventory was paid for

Explanation:

The U.S. company should register the inventory purchase in their balance sheet using the $/C$ exchange rate at that date the inventory was paid for since that would represent the actual monetary value spent on inventory. The rate is subject to change and, therefore, using the exchange rate at the time of delivery, sale or at the balance sheet date, could incorrectly represent the company's inventory expenses.

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1 year ago
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A small college employs two economists. Rob has been employed by the college for 15 years and Bill has been employed for one yea
Korvikt [17]

Answer:

E. efficiency wages

Explanation:

Clearly this isn't a discrimination case, as Rob has a robust background with the company (15 years). Although their work output may be the same, Rob's experience justifies the higher pay.

This is one form of efficiency wage theory, holding that higher wages lead to increased employee productivity. This way, Rob gets an incentive for staying with the company.

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2 years ago
From the information given below, calculate the quick ratio. Particulars Amount (in $) Particulars Amount (in $) Cash 20,000 Acc
Nat2105 [25]

Answer:

C. 1.25 times

Explanation:

Given: Cash 20,000 Accounts payable 11,000 Notes receivable 15,000 Wages payable 5,000 Stock 5,000 Retained earnings 20,000 Inventory 6,000 Notes Payable 8,000.

Current asset: Cash.

Current Liability: Accounts payable.

Now, calculating the quick ratio.

Formula; Quick ratio= \frac{Current\ asset- Inventory}{Current\ liability}

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2 years ago
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