Answer:
11.076%
Explanation:
The computation of the WACC is shown below:
= Weightage of debt × cost of debt × ( 1- tax rate) + (Weightage of common stock) × (cost of common stock)
= (0.40 × 8.5%) × ( 1 - 34%)+ (0.60 × 14.72%)
= 2.244% + 8.832%
= 11.076%
The cost of common stock is
= Risk free rate of return + Beta × market risk premium
= 3.8% + 1.3 × 8.4%
= 3.8% + 10.92%
= 14.72%
He invested it into the the british bond market, and waited a year to sell it as its value rose. Value ended up being about 600 million pounds in today’s economy
Answer:
- <u>The current year's net income will be too low.</u>
- <u>The current year's cost of goods sold will be too high.</u>
Explanation:
1. Note that, the Net income of a company often depends solely on the valuation of their ending inventory. Since Q-mart made an error by not reporting the inventory kept in separate warehouse it has in effect reduce the monetary value of inventory carried forward into the current year.
2. The cost of goods sold is gotten from comparisons of total revenue and the total expenses. Since Q-mart understated it's ending inventory, the <u>balance sheet would show a higher value for the cost of goods sold.</u>
Answer:
To determine the current equivalent cost of a construction built in 1980 whose cost was $ 2.7 million, we must establish the relationship between the price index for that year, comparing it with that of the current year.
Taking into account that the average cost index for 1980 was 1941, and that said value is currently 3620, we can note that there was a significant increase in costs. Since 3620/1941 = 1.86, to determine the current cost of construction we must multiply its cost by 1.86.
So, since 2.7 x 1.86 = 5.022, we can establish that the equivalent cost at current prices of said building would have been $ 5,022,000.
