Answer:
Turnbull's weighted average cost of capital will be higher by 0.65% if it has to raise additional common equity capital.
Explanation:
By combining the WACC formula and retained earnings cost of capital,we will arrive at;
WACC = Debt W × after tax cost of debt + Preferred stock weight × cost of capital + Equity W × Cost of capital
= 58% × 4.92% + 6% × 9.3% + 36% × 12.4%
= 2.85% + 0.56% + 4.46%
= 7.87%
Also, using the same WACC formula and using common equity cost of capital, , we will arrive at the below;
WACC = Debt W × after tax cost of debt + preferred stock weight × cost of capital + Equity W × cost of capital
= 58% × 4.92% + 6% × 9.3% + 36% × 14.2%
= 2.85% + 0.56% + 5.11%
= 8.52%
Therefore, increase cost using common equity over retained earnings is [ 8.52% - 7.87%]
= 0.65%
N.B we arrived at 4.92% for after tax by;
Pre tax 8.2%
Current tax rate 40%
= Pre tax × ( 1 - cost of debt)
= 8.2% × ( 1 - 40%)
= 8.2% × 0.6%
= 4.92%
Answer:
A) Core Competency
Explanation:
Core Competency
Core competency refers to an organisation's strategic advantage over its competitors, it means the capabilities and the resources that a business must find, cultivate and explore in order to have an advantage over its competitors in the same line of business.
In order for an activity to be defined as a business' core competence, that activity must be unique, making it difficult for others to re-produce an it must also produce a unique level of benefit or value for the consumers of the product.
Since the car parts company has innovated a new automobile product with unique value, <u>It has cultivated and explored its core competency </u>
Answer:
<u>False</u>
Explanation:
<em>There is no such thing</em> as community engagement graduation requirements. However there is internship as a requirement for college graduation.
Therefore , Orlando can use this internship to only fulfill his internship graduation requirements having learnt practical knowledge from the animal shelter for six weeks.
Answer:
Correct answer is A.
<u>$14.38 per direct labor-hour</u>
Explanation:
If the budgeted direct labor time for December is 8,000 hours, then total budgeted factory overhead per direct labor hour is (rounded):
Total budgeted factory overhead for December= Variable Factory Overhead rate per direct labor hour * budgeted direct labor time for December + Fixed Factory Overhead per month
Total budgeted factory overhead for December = 5*8000 + 75000
Total budgeted factory overhead for December = $ 115,000
Total budgeted factory overhead per direct labor hour = Total budgeted factory overhead for December/budgeted direct labor time for December
Total budgeted factory overhead per direct labor hour = 115000/8000
Total budgeted factory overhead per direct labor hour = 14.38
Answer:
The market value of equity is $2,152.22
Explanation:
FCFE = 205 - 22*(1 - 35) + 3
= 193.70
market value = 193.70/(0.12 - 0.03)
= $2,152.22
Therefore, The market value of equity is $2,152.22
