A company is 49% financed by risk-free debt. The interest rate is 8%, the expected market risk premium is 6%, and the beta of the company’s common stock is .59. a. What is the company cost of capital? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Cost of capital

Answers

Answer 1

Answer: 9.81%

Explanation:

Cost of capital = (cost of debt * weight of debt) + ( cost of equity * weight of equity)

Cost of Equity = Risk free rate + beta * Market risk premium

= 8% + 0.59 * 6%

= 11.54%

Cost of capital = (8% * 49%) + (11.54% * 51%)

= 9.81%


Related Questions

Gravel Company reported net income of $4,500,000 in 2021. The weighted average number of common shares outstanding during 2021 was 200,000 shares. Gravel paid $250,000 in dividends on preferred stock, which was convertible into 40,000 shares of common stock. How much is diluted earnings per share for 2021

Answers

Answer:

the diluted earning per share is $17.71

Explanation:

The computation of the diluted earning per share is shown below:

Diluted earning per share is

= (Net income - preference dividend) ÷ ( oustanding common stock shares + convertible shares)

= ($4,500,000 - $250,000) ÷ (200,000 + 40,000)

=  $4,250,000 ÷ 240,000 shares

= $17.71

hence, the diluted earning per share is $17.71

We simply applied the above formula so that the correct value could come

And, the same is to be considered

100 points
Think of two methods used to improve productivity in business. Discuss your reasons for choosing these methods.

Answers

Answer:

Improve workplace conditions

Explanation:

environment that’s too hot or too cold distracts from concentration, as employees will spend more time walking around to get their coats or an electric fan. Ensure both heating and air-conditioning systems are in working order for when the relevant season comes around

Answer:

Improve workplace conditions

Explanation:

The ________ technique fits situations where more recent events carry greater influence. a. dynamic forecasting b. moving average forecasting c. indexing d. static forecasting

Answers

Answer: a. Dynamic forecasting

Explanation:

Dynamic forecasting has to do with when the forecasted value or the predicted value of the dependent variable that us lagged in a research is used rather than using the actual value.

The dynamic forecasting technique fits situations where more recent events carry greater influence.

When a party purchases an app from the author, the copyright transfers from the author to the buyer. What is this is called

Answers

software license agreement

Van Hookie, Inc. issued bonds with a maturity amount of $200,000 and a maturity ten years from the date of issue. If the bonds were issued at a premium, this indicates that:________

a. the effective yield or market rate of interest exceeded the stated (nominal) rate.
b. the stated rate of interest exceeded the market rate.
c. the market and stated rates coincided.
d. no necessary relationship exists between the two rates

Answers

Answer:

c

Explanation:

Fixed costs can be defined as costs that:_______

a. a vary inversely with production.
b. vary in proportion with production.
c. are incurred only when production is large enough.
d. are incurred even if nothing is produced.

Answers

Answer:

d. are incurred even if nothing is produced.

Explanation:

The fixed cost is the cost which remains the same in the case when the production level is increased or decreased or same

Also if nothing is produced still the fixed cost is incurred

Like: rent, depreciation etc

This would remain the fixed . And also cannot be avoided

Therefore the correct option is d.

And other options are wrong

A US Multi National Corporation has a contract for a relatively predictable long-term inflow of Japanese yen. The firm decides to hedge the yen exposure by finding a supplier in Japan and paying for these imports in yen. This hedging strategy is known as ________.

Answers

Answer: a natural hedge

Explanation:

Natural hedge is simply a strategy that is used by a company in order to reduce risk and this is done through the investment in the assets that their performance is not positively correlated.

Such companies typically makes revenue in the currency of another country. Since the firm decides to hedge the yen exposure by finding a supplier in Japan and paying for these imports in yen, this hedging strategy is known as natural hedge.

Which one of these financial administration tasks or concepts involves
tracking and monitoring revenue and expenses?
O A. Hiring
O B. Bookkeeping
O C. Selling
O D. Investing

Answers

Answer:

B

Explanation:

Bookkeeping

A company issued.. A company issued 10-year, 6.00% bonds with a face value of $100,000. The company received $97,767 for the bonds. Using the straight-line method of amortization, the amount of interest expense for the first interest period is:________.a) $2.233.00 b) $5,776.70 c) $6,000.00 d) $6,223.30

Answers

Answer:

d) $6,223.30

Explanation:

Interest payable in cash = 100000*6% = $6000

Amortization of bond discount (Straight line) = Discount in issue of bond / number of years

Amortization of bond discount = (100000 - 97,767) / 10

Amortization of bond discount = 2233 / 10

Amortization of bond discount = 223.3

Amount of interest Expense = 6000 + 223.3

Amount of interest Expense = $6,223.30

At December 31, 2020, the unadjusted balance in Allowance for Doubtful Accounts is a credit of $16,000. Instructions Journalize and post the adjusting entry for bad debts at December 31, 2020. Journalize and post to the allowance account the following events and transactions in the year 2020. March 1, a $1,900 customer balance originating in 2020 is judged uncollectible. May 1, a check for $1,900 is received from the customer whose account was written off as uncollectible on March 1. Journalize the adjusting entry for bad debts on December 31, 2020. Assume that the unadjusted balance in Allowance for Doubtful Accounts is a debit of $2,000, and the aging schedule indicates that total estimated bad debts will be $38,300.

Answers

Answer:

a. Journal Entry

December 31, 2020:

Debit Bad Debts Expense $16,000

Credit Allowance for Doubtful Accounts $16,000

To record bad debts expense.

b. Journal Entries:

March 1, 2020:

Debit Allowance for Doubtful Accounts $1,900

Credit Accounts Receivable $1,900

To record the write-off of uncollectible account.

May 1, 2020:

Debit Accounts Receivable $1,900

Credit Allowance for Doubtful Accounts $1,900

To record the reversal of the March 1, 2020 entries.

Debit Cash $1,900

Credit Accounts Receivable $1,900

To record the receipt of check from the customer.

c. Journal Entries:

Debit Bad Debts Expense $40,300

Credit Allowance for Doubtful Accounts $40,300

To record bad debts expense and bring the Allowance for Doubtful Accounts to a credit balance of $38,300.

Explanation:

a) Adjusting journal entries are recorded at the end of the accounting period to provide for accrued expenses and revenues, expense prepayments, and deferred revenue, including depreciation expense, thereby ensuring that the accounts are reported in accordance with the accrual concept.

what is journal entry is goods return to sanjay​

Answers

Two Types of Goods Return:

Purchases Return or Return outward.
Sales Return or Return inward.
Purchases Return Goods

For Examples :

Purchases goods from Mrs. Kuheli Rs. 2000

Jill Bower purchased 320 shares of stock for $29 a share and sold it for $35 a share. The commissions required to buy and sell her stock totaled $300 for each transaction. Assuming she received no dividends during the time she owned the stock, what is her total investment on the purchase of this stock?a. $2.140.b. $2.500.c. $1,580.d. $625.e. $1860.

Answers

Answer:

Jill Bower

Her total investment on the purchase of this stock is:

$9,880.

Explanation:

Number of shares purchased = 320

Share price at purchase = $29

Cost of the purchase = $9,280

Purchase Commission =    300

Total cost =                   $9,580

Sales proceeds =         $11,200

Sales Commission =          300

Net proceeds =           $10,900

Therefore, the total investment will be equal to the purchase cost (initial investment) + the sales commission, which is equal to $9,880.

= $9,580 + $300

= $9,880

Muddy Meadows Earthmoving can purchase a bulldozer for $147,000. After 7 years of use, the bulldozer should have a salvage value of $50,000. What depreciation is allowed for this asset in Year 4 for.(a) Straight-line depreciation?(b) 150% declining balance depreciation?(c) 40% bonus depreciation with the balance using 5-year MACRS?PLEASE DO NOT USE EXCEL AND SHOW CALCULATIONS1.) a) $13,857; b) $15,676; c) $10,1612.) $13,857; b) $15,676; c) $44663.) $21,000; b) $15,676; c) $10,1614.) $13,857; b) $12,437; c) $10,161

Answers

Answer:

1) a. $13,857 : b. $15,676 : c. $10,161

Explanation:

(a) Straight-line depreciation:

depreciation expense per year = ($147,000 - $50,000) / 7 = $13,857 per year

(b) 150% declining balance depreciation:

150% depreciation = 1/7 x 1.5 = 21.42%

depreciation expense year 1 = $147,000 x 1/7 x 1.5 = $31,500

depreciation expense year 2 = $115,500 x 1/7 x 1.5 = $24,750

depreciation expense year 3 = $90,750 x 1/7 x 1.5 = $19,446

depreciation expense year 4 = $71,304 x 1/7 x 1.5 = $15,279 (this number is similar to $15,676, so I will choose that number. Depreciation % may vary a little due to rounding)

(c) 40% bonus depreciation with the balance using 5-year MACRS:

depreciation expense year 1 = $147,000 x 40% = $58,800

depreciation expense year 2 = $88,200 x 32% = $28,224

depreciation expense year 3 = $88,200 x 19.20% = $16,934

depreciation expense year 4 = $88,200 x 11.52% = $10,161

A stock has an expected return of 13.4 percent, the risk-free rate is 9 percent, and the market risk premium is 10 percent. What must the beta of this stock be?

Answers

Answer: 0.44

Explanation:

From the question, we are informed that a stock has an expected return of 13.4 percent, the risk-free rate is 9 percent, and the market risk premium is 10 percent.

The beta of this stock be calculated as:

= (13.4% - 9%) / 10%

= 4.4% / 10%

= 0.044 / 0.10

= 0.44

Therefore, the beta of the stock is 0.44

What is the difference between earnings per share (EPS), funds from operations (FFO), adjusted funds from operations (AFFO), and dividends per share?

Answers

Answer:

Earnings per share is defined as the net earnings/ profit of a company divided by the number of common stock outstanding. It therefore shows just how much the company made per individual share.

Funds from Operations (FFO) on the other hand refer to cashflow from operations of Real Estate Investment Trusts (REITs). REITS use this as their EPS and so it is sometimes quoted per-share.

Adjusted Funds From Operations (AFFO) are calculated in similar fashion to FFOs and used by REITS as well. This one adjusts the FFO for costs incurred which means it is more accurate and so preferred over FFO.

Dividend per share is the amount of dividend that has been paid to each share within a period. This definition means that even interim dividends are included in the calculation which is done by dividing the total dividends over a period by the number of outstanding shares a company has.

Accounting Employees view budgeting more positively when goals are established for them by senior management.

a. True
b. False

Answers

Answer:

B

Explanation:

Wandering RV is evaluating a capital budgeting project that is expected to generate $36,950 per year during its six-year life. If its required rate of return is 10 percent, what is the value of the project to Wandering RV?

Answers

Answer:

the value of the project is $16,096.88

Explanation:

The computation of the value of the project is shown below:

= (Expected amount generated per year × (1 - (1 ++ rate of returm)^-time period )) ÷ rate of return

= $36,950 ×  [1 - 1.1^-6] ÷ 0.1

= $16,0926.88

Hence, the value of the project is $16,096.88

We simply applied the above formula so that the correct value could come

And, the same is to be considered

A tax exempt money market fund has an annual return of 3.82 percent. What is your equivalent taxable rate if you are in a 32 percent marginal tax bracket?
A) 3.15 percent
B) 3.38 percent
C) 5.62 percent
D) 6.11 percent
E) 6.81 percent

Answers

Answer:

C) 5.62 percent

Explanation:

Tax exempt rate = Taxable Rate * (1 - tax rate)

3.82 = Taxable Rate * (1 - 0.32)

3.82 = Taxable Rate * 0.68

Taxable Rate = 3.82 / 0.68

Taxable Rate = 5.617647058823529

Taxable Rate = 5.62%

When the character playing Alice in Wonderland signed autographs and had her picture taken with guests at Disneyworld, it was an example of a(n):______

a. Customer action
b. Onstage contact employee action
c. Backstage contact employee action
d. Support process
e. Audience action

Answers

Answer: B. Onstage contact employee action

Explanation:

When the character playing Alice in Wonderland signed autographs and had her picture taken with guests at Disneyworld, it was an example of onstage contact employee action

Onstage visible actions by employees are referred to as the face-to-face contacts that the employees of an organization have with their customers while delivering the products. For the backstage contact employee action, those are not visible to customers.

Backdating refers​ to:_________ A. choosing the grant date of a stock option retroactively. B. choosing the exercise date of the stock option retroactively. C. choosing the strike price of a stock option retroactively. D. choosing the share conversion ratio retroactively.

Answers

Answer:

A. choosing the grant date of a stock option retroactively

Explanation:

Stock options are the priviledge that an individual has to purchase a stock at a particular time and date.

Usually it is given to those that already have shared.

Companies give this priviledge to existing shareholders to reduce stock dilution.

Backdating of stock options means that the options grant date can be altered to a time when the option price was lower.

In effect those that practice this get stock at lower prices and make more profit per share.

The grant date is chosen retroactively

Answer:

A. choosing the grant date of a stock option retroactively.

Explanation:

First of all, backdating is usually illegal and sadly, many companies do it to boost employee compensation. This is an example of agency conflicts since management puts their interests ahead of the interests of stockholders.

Backdating refers to retroactively setting the date of a contract in order to benefit one party. If management had done things properly, why would they need to backdate a compensation plan?

Ayayai Corp. has the following inventory data:________. July 1 Beginning inventory 43 units at $20 $860 7 Purchases 126 units at $24 3024 22 Purchases 31 units at $22 682 $4566 A physical count of merchandise inventory on July 30 reveals that there are 49 units on hand. Using the average cost method, the value of ending inventory is:__________.

Answers

Answer:

the ending inventory is $1,118.67

Explanation:

The computation of the ending inventory using the average cost method is shown below:

But before that first determined the average cost per unit which is

= Total cost ÷ total number of units

= $4,566 ÷ (43 units + 126 units + 31 units)

= $22.83 per unit

Now there is the ending inventory units i.e. 49 units

So, the ending inventory is

= $22.83 × 49 units

= $1,118.67

Hence, the ending inventory is $1,118.67

If Division Inc. expects to sell 200,000 units in the current year, desires ending inventory of 24,000 units, and has 22,000 units on hand as of the beginning of the year, the budgeted volume of production for the year is 202,000 units. a) True b) False

Answers

Answer:

a) True

Explanation:

Sales = Opening + Production - Closing

$200,000 = $22,000 + Production - $24,000

Production = 202,000 Units

Hence, the answer is a. True

Explain the Virtuous cycle

Answers

here you go! hope this helps!!

Business consultant Peter Drucker said that the most important factor of production is knowledge.a. Trueb. False

Answers

Answer:

True

Explanation:

Peter Drucker proposed the idea of knowledge management. He praised knowledge as being the most important factor of production, I guess he associated knowledge with technology. He even used the terms knowledge worker and knowledge productivity. He was one of the most influential authors about management and he focused a lot on continuous learning.

He has $800 to spend and wants to buy either a camera or a new photo editing software. Both the camera and the software cost $800, so he can only buy one. This illustrates the principle that:__________.

Answers

Answer: b. people face trade-offs.

Explanation:

Due to scarcity in the resources that we possess, i.e our resources are not infinite, we are forced to make decisions sometimes that will see us giving up something we want for another thing that we want.

This is called trade-offs and people face them all the time. This man want to wants to buy either a camera or an editor but due to the price can only buy one. He would therefore have to give up one for the other which makes this a trade-off.


(2-3 statements answer only) I'll give brainliesr.

Does a labor market equilibrium really exist?​

Answers

Explanation:

I don't think so because now it is the employers who fixed to pay for a labour

Suppose that some country had an adult population of about 47 million, a labor-force participation rate of 123.4 percent, and an unemployment rate of 31.0 percent. How many people were unemployed?

a. 18 million
b. 81.0 million
c. 58 million
d. 40 million

Answers

The number of unemployed peoples is 17.67 Millions, when the rate of unemployed peoples are 31%.

What is unemployment?

Unemployment happens when individuals who desire to do work are incapable to encounter jobs, which displaces economic output.

High pressure rates of unemployment are a sign of economic pain, while highly low-level rates of unemployment may sign a hotted economy.

Computation of unemployed peoples:

According to the given information,

The labor force rate =  123.4%, and

Absolute Value =  47 million

Then, the labor force population is:

[tex]\text{labor Force Population} = \text{The Labor Force Rate} \times \text{Absolute Value}\\\\\text{labor Force Population} =123.4\% \times 47 \text{Million}\\\\\text{labor Force Population} =57 \text{Approx.}[/tex]

Now, the number of unemployed peoples are:

According to the given information,

unemployment rate = 31.0

Then,

[tex]\text{Number of Unemployed Peoples} = \text{Unemployment Rate} \times \text{Labor force Population}\\\\\text{Number of Unemployed Peoples} = 31\% \times 57 \text{Million(Approx)}\\\\\text{Number of Unemployed Peoples} =17.67\text{Million}[/tex]

Therefore, the number of unemployed peoples are 17.67 Millions.

Learn more about unemployment, refer to:

https://brainly.com/question/14227610

A disadvantage of flextime plans is that they often

Answers

Answer:

A disadvantage of flextime plans is that they often: require supervisors and managers to work longer hours.

Explanation:

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Flextime is a work course of action in which employees can select the beginning and wrapping up times of their workday.

Disadvantages of flextime plans are:

Prevent communication between administration and staff. When planning gatherings, interviews, and training sessions, planning issues are unavoidable.

Make periods of understaffing. Flextime may not be open in adequate numbers to cover all necessary assignments if too numerous employees utilize it.

Make it challenging to screen representative hours. It can be challenging to track an employee's hours and make any doubt they are satisfying their commitments on the off chance that they are not pushed to clock in and out.

A rise in the possibility of staff burnout. Giving representatives more noteworthy control over their work-life adjustments through flextime can be a marvelous thought.

It is important to carefully consider the potential disadvantages before implementing a flextime policy for the employees.

Learn more about Flextime, here:

https://brainly.com/question/32151818

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When FBLA-PBL was first founded in 1937, it was originally for ____.

A. just college students

B. high school and college students

C. just high school students

D. junior high school students

Answers

The answer is A (sorry if wrong)

Answer:is actually b

Explanation:

Which of the various interpersonal skills is most important? Justify your answer.

Answers

Explanation:

Communication. One of the most important interpersonal skills in any job is communication. Whether you work in IT, customer service, construction, or any other industry, you will need to be able to communicate clearly and effectively with others through both oral and written communications.

Communication is the most important interpersonal skill.

What is interpersonal skill?

The actions and strategies a man does to communicate with one another successfully are known as interpersonal skills. People constantly contact others when doing so, whether that is at jobs, in social environments, or even within their families.

Communication is one of the most important interpersonal skills that a person can have. As it helps in telling what the person is wanted to tell. It also helps in understanding. It develops empathy as well as emotional intelligence.

As communication is good it would help to convey the message that you want to portray to another being. It helps in developing the personality and to most of the people nowadays used. Communication comes under the category of interpersonal skills.

Learn more about interpersonal skill, here:

https://brainly.com/question/15225951

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