You are given the following information about the open economy of Macroland for 2014: - GDP $100 billion - Consumption $70 billi
1 answer:
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Answer: 9.03%.
Explanation:
Given: The Two Dollar Store has a cost of equity of 11.9 percent, the YTM on the company's bonds is 6.2 percent, and the tax rate is 40 percent.
Debt to equity ratio is .54
i.e.
Adding denominator to numerator on both the sides, we get,
i.e. Weighted equity =
From (i)
Adding denominator to numerator on both the sides we get,
Thus, weight of debt=
Now,
Weighted average cost of capital=(Weight of equity) × (cost of equity)+(Weight of debt)×(Cost of debt)×(1-tax rate)
Hence, the weighted average cost of capital is 9.03%.
Answer:
50% share.
Explanation:
Given:
There are only three firms in a market.
The largest firm has sales of $500 million.
The second-largest has sales of $300 million.
The smallest has sales of $200 million.
Question asked:
The market share of the largest firm is ?
Solution:
As we know:
Total sales of the largest company = $500 million.
Total sales of the market = Sales of largest firm + Sales of second largest firm+ Sales of smallest firm
Total sales of the market = $500 million + $300 million + $200 million
= $1000 million
Therefore, the market share of the largest firm is 50%.