Charlotte's Crochet Shoppe has 10,700 shares of common stock outstanding at a price per share of $63 and a rate of return of 11.13 percent. The company also has 320 bonds outstanding, with a par value of $1,000 per bond. The pretax cost of debt is 5.89 percent and the bonds sell for 93.6 percent of par. What is the firm's WACC if the tax rate is 40 percent?

a. 8.79%
b. 8.49%
c. 9.93%
d. 8.33%
e. 9.52%

Answers

Answer 1

Answer:

a. 8.79%

Explanation:

WACC = Weight of debt * Pretax cost * (1 - Tax) + Weight of Equity * Cost of Equity

Value of Equity = 10,700 * $63 = $674,100

Value of debt = 320 * $1000 * 93.6% = $299,520

Weight of Debt = $299,520/($299,520 + $674,000) = 30.76%

Weight of Equity = $674,000/($299,520 + $674,000) = 69.24%

WACC = 30.76% * 5.89% * (1 - 40%) + 69.24% * 11.13%

WACC = 30.76% * 5.89% * 0.60 +  69.24% * 11.13%

WACC = 0.010870584 + 0.07706412

WACC = 0.087934704

WACC = 8.79%


Related Questions

This morning, Mary bought a ten-year, $1000 par value bond with a 7.0% coupon rate and annual payments. She paid $994 for the bond. If the market interest rate on this type of bond decreases to 6.5% tonight, how much will Mary receive for her first coupon payment?a. $32.50.b. $35.00.c. $65.00.d. $69.58.e. $70.00.

Answers

Answer:

e. $70.00

Explanation:

The coupon payment is the amount received by the bondholder on a periodic basis during the life of the bond which is based on the bond's face value which in this case is $1000

Note that the coupon payments are expected to be made once a year.

Coupon payment=bond face value*coupon rate

bond face value=$1000

coupon rate=7%

annual coupon payment=$1000*7%

annua coupon payment=$70.00

Do you think your career goals will be the same 5 years from now? 10 years from now? Why or why not?

Answers

Answer:

It maybe differ from your age, if you are in middle school now then maybe it may change later. But if you are already a graduate student then the main subject u r focusing in may be your career

The career goals of an individual are definitely subject to change during any given period like 5 years or 10 years. These changes in career goals may occur due to the change in his or her surroundings and other external factors.

What is the significance of career goals?

Career goals can be referred to or considered as such goals that an individual wishes to pursue in order to build his career and gain life and income opportunities. These career goals may be different for different individuals as per their choices.

In fact, the career goals may change for an individual as well over a span of any given period. The reasons for these changes may be unidentified in present. Some factors may be internal, such as change in desire; whereas the external factors include environmental and social changes.

Therefore, the significance regarding the change in career goals of an individual has been aforementioned.

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You purchased 1,350 shares of stock in Natural Chicken Wings, Inc., at a price of $43.58 per share. Since you purchased the stock, you have received dividends of $1.09 per share. Today, you sold your stock at a price of $47.76 per share. What was your total percentage return on this investment?A. 10.84%B. 12.09%C. 13.76%D. 9.59%E. 12.90%

Answers

Answer:

B. 12.09%

Explanation:

Calculation for the total percentage return on this investment

Investment total percentage return= ($47.76 per share -$43.58 per share+$1.09 per share/$43.58) × 100

Investment total percentage return= $5.27/$43.58 × 100

Investment total percentage return= 0.1209× 100

Investment total percentage return= 12.09%

Therefore the total percentage return on this investment will be 12.09%

Assume the beta for the stock market in general is 1.0 and the beta for World-Wide Television Productions is 2.8. If the stock market increases in value by 5 percent, what is the expected increase in value for the World-Wide Productions stock?

Answers

Answer:

Stock increase = 14%

Explanation:

Market increase = 5%

Stock Beta = 2.8

Stock increase = Stock beta * Market Increase

Stock increase = 2.8*5%

Stock increase = 0.14

Stock increase = 14%

Calculate unemployment rate if adult population of the nation is 800 people of which 450 people are working and 30 are looking for working.

Answers

Answer:

6.25%

Explanation:

We can calculate the unemployment rate by dividing the unemployed people by the total labor force

Total labor force = Working people + People looking for work

Total labor force = 450 + 30

Total labor force = 480

Unemplyed people = 30

Unemployment rate = 30/ 480

Unemployment rate = 0.0625 OR 6.25%

If the current price of a stock is P=40, its β=1.25, and the expected rate of return of the market portfolio is r¯M=0.13, what does CAPM predict for the price of the stock in a year? Use rf=0.05 as the risk-free rate.

Answers

Answer:

im sorry

Explanation:

How you can identify the market structures discussed in the coverage

Answers

Answer:

The main characteristics that determine a market structure are: the number of organizations in the market (selling and buying), their relative negotiation power in relation to the price setting, the degree of concentration among them; the level product of differentiation and uniqueness; and the entry and exit barriers ...

Explanation:

Please mark me as the brainliest answer

Printers today have many features that include improved quality, photo printing capabilities, digital camera connectivity, built-in flash memory card readers, wireless connectivity, and faster speed. Suppose you are in the market for a new personal printer. Make a list of the most important features needed to meet your needs, and then research printers to identify the best printer for your needs. Be sure to consider both the price of the printer and the price of consumables (such as paper and ink/toner) in your evaluation process​

Answers

Answer:

A printer is a device that accepts text and graphic output from a computer and transfers the information to paper, usually to standard size sheets of paper. Printers vary in size, sophistication, speed, and cost. In general, more expensive printers are used for higher-resolution color printing.

Printers today have many features that include improved quality, photo printing capabilities, digital camera connectivity, built-in flash memory card readers, wireless connectivity, and faster speed.  

The Six important printer qualities are:

Color: It is important for users who need to print pages for presentations or maps, photos and other pages where color is part of the information. Color printers can also be set to print only in black-and-white. Color printers are more expensive to operate since they use two ink cartridges (one color and one black ink, toner) that need to be replaced after a certain number of pages. Users who don't have a specific need for color and who print a lot of pages will find a black-and-white printer cheaper to operate.  Resolution: Printer resolution (the sharpness of text and images on paper) is usually measured in dots per inch (dpi). Most inexpensive printers provide sufficient resolution for most purposes at 600 dpi. Speed: If you do much printing, the speed of the printer becomes important. Inexpensive printers print only about 3 to 6 sheets per minute. Color printing is slower. More expensive printers are much faster.Memory: Most printers come with a small amount of memory (for example, one megabyte) that can be expanded by the user. Having more than the minimum amount of memory is helpful and faster when printing out pages with large images or tables with lines around them (which the printer treats as a large image). Wireless connectivity : Specialized printer nowadays have wireless connectivity which allows user to communicate with the machine without physical operation. Like one can just give command to the printer to print their projects using their mobile phone while sitting on the couch. This feature might add extra bucks to the bill but its worth it. Printer languages The commands from the computer to the printer to tell the printer how to format the document being printed. These commands manage font size, graphics, compression of data sent to the printer, color, etc. The two most popular printer languages are Postscript and Printer Control Language.

Conclusively the best printer will be the one which will provide pleasant color contrast, good resolution, enough memory, wireless connectivity and have better language settings.

To some extent, Disney produces a product and a service. When it went to Japan, it represented an innovation to the Japanese market. The fact that it did well speaks to the ___________ of that innovation and the role that the Japanese partner played in addressing the specific cultural issues.

Answers

Answer: diffusion

Explanation:

Diffusion of innovation has to do with the spread of a particular innovation. We should note that the innovation was successful in Japan, and the Japanese accepted it.

The fact that it did well speaks to the diffusion of that innovation and the role that the Japanese partner played in addressing the specific cultural issues.

Use the following bond quotation:Issuer Symbol Callable Coupon Maturity Rating Price YieldWalmart WMT.IM No 4.875 7/8/2040 Aa2 111.44 4.06What is the yield to maturity? Enter your answer as a decimal.If the bond has a face value of $1,000, how much does it currently cost (in $, and ignoring accrued interest)?

Answers

Answer:

Ok ok ok ok ok ok ok ok ok ok ok ok ok ok ok ok

One-year Treasury bills currently earn 3.25%. You expect that one year from now, 1-year Treasury bill rates will increase to 3.45%. The liquidity premium on 2-year securities is 0.06%. If the liquidity premium theory is correct, what should the current rate be on 2-year Treasury securities?

Answers

Answer:

the current rate be on 2-year Treasury securities is 3.38%

Explanation:

The computation of the current rate on the 2-year treasury securities is shown below:

= {(1 + current interest rate) × (1 + increased current interest rate + liquidity premium)^(1 ÷ 2)} - 1

= {(1 + 3.25%) × (1 + 3.45% + 0.06%)^(1 ÷ 2)} - 1

= (1.0325 × 1.0351)^(1 ÷ 2)} - 1

= 3.38%

Hence, the current rate be on 2-year Treasury securities is 3.38%

Sally Smythe enters into a partnership by contributing the following:

Cash $14,200
Accounts Receivable $3,700
Machinery which cost $2,200
Fair market value $1,325
Accounts payable $2,100.

What amount will be recorded in her capital account?

Answers

Answer:

$17,125

Explanation:

Sally's capital should include all the assets that she contributes to the partnership minus the liabilities. Contributions to partnerships must be recorded at fair market value.

Sally's capital account = cash + accounts receivable + FMV of machinery - accounts payable = $14,200 + $3,700 + $1,325 - $2,100 = $17,125

Can anyone help? please

Answers

Answer:

Question 1

Individuals with higher education levels have less propensity to commit crime for many reasons.

First of all, they are higher-skilled individuals, which means that demand for their labor is higher, because they are more desirable to employees. This means that they are likely to earn incomes high enough to avoid committing crime as a form of economic survival.

Question 2

Many people have put in question the idea of going to college these days, and there are valid points to this. For example, it is true that going to college represents important opportunity costs: not being able to work full-time while attending classes, and forgoing that salary, and also the costs associated with the student debt.

However, statistics show that college-graduates earn significantly more than non-college educated people, meaning that the benefits of college education will be lower than the benefits as long as the time preference of the students is long-term enough.

Agency employees interact with Taco Bell employees across job types because they need knowledge about the products and plans, increasing their:________

a. boundary spanning.
b. hierarchical sensitivity.
c. decision informity.
d. staff validity.
e. task validity.

Answers

Answer:

c. decision informity.

Explanation:

Since in the question it is mentioned that there is a interaction of Agency employees with the employees of Taco bell for different types of job as they need the knowledge regarding the product and plans that increased the decision informity

As if you have great knowledge and information so you are able to take the right decision i.e. ultimately good for a company

Therefore the option c is correct

Martinez Corporation reported net sales of $773,000, net income of $134,000, and total assets of $7,714,260. The profit margin is:_____

a. 577.0%
b. 5.77%
c. 82.66%
d. 1.73%
e. 17.34%

Answers

Answer:e. 17.34%

Explanation:

Profit margin  shows how the activities of a firm or business activity are profitable by taking into accounts  costs involved in producing and selling goods.

 it can be calculate in three ways using the  Gross profit margin formulae, Net Profit Margin formulae or the Operating margin formulae

Given

net sales = $773,000

net income = $134,000

Total assets of $7,714,260

We will use the Operating margin formulae which is the ratio of the Operating income to Revenue  multiplied by 100

Profit margin =Operating income ( Net Income )/Revenue ( Net Sales)  x 100

Profit margin = $134,000/$773,000  x 100

=0.173 x 100

=17.335  rounded to 1`7.34%

Suppose price decreases from $27.00 to 513.00. Using the mid-point formula, the percentage change in price is:_________ a) 0.7 - 70 percent b) 14 percent c) -0.7 - 70 percent. d) -0.35 -- 35 percent.

Answers

Answer: c) -0.7 - 70 percent.

Explanation:

Using the midpoint formula, the change will be;

[tex]= \frac{P_{2} - P_{1} }{\frac{P_{2} + P_{1}}{2} } \\\\= \frac{13 - 27 }{\frac{13 + 27}{2} }\\\\= -0.7[/tex]

= -70%

The geometric average return answers the question What was your return in an average year over a particular period?
A. What was your average compounded return per year over a particular period?
B. What is the best method to use to calculate your average return?
C. What is the least amount of returns need to calculate an average?
D. What was your average return per year over a particular period

Answers

Answer: A. What was your average compounded return per year over a particular period?

Explanation:

Geometric return is calculated by the formula;

= [(1 + r1) * (1 + r2) * (1 + r3) *.... (1 + rn)] ^1/n

This allows for one to calculate the compounding effect over a period of time by showing the compounded annual growth rate which means that it tells what the average compounded return was per year in a particular period.

Suppose an increase in the demand for dollars has caused an appreciation of the dollar. According to the purchasing power parity theorem, the value of the dollar in the future will:

Answers

Answer:

Appreciate more

Explanation:

Suppose an increase in the demand for dollars has caused an appreciation of the dollar. According to the purchasing power parity theorem, the value of the dollar in the future will appreciate more. This is because the shift in demand and supply will cause an increase in the value of the dollar. Purchasing power parity (PPP) is a theory which states that exchange rates between currencies are in equilibrium when their purchasing power is the same in each of the two countries.

Honolulu, Inc. sells its product for $22 per unit. Variable costs are $8 per unit, and fixed costs are $6,000 per month. If the firm expects to sell 2,000 units next month, what is its margin of safety in dollars of sales revenue?A $34,562.B. $12.571.C. $1.571.D 56,000.

Answers

Answer:

the correct option is A. $34,562

Explanation:

The computation of the margin of safety in sales dollars is shown below:

As we know that

Margin of safety = Actual sales - break even sales

where,

Actual sales units is 2,000

And, the break even sales is

= Fixed cost ÷ contribution margin per unit

= $6,000 ÷ ($22 - $8)

= $6,000 ÷ $14

= 429

Now margin of safety in dollars is

= (2,000 - 429) × $22

= $34,562

Hence, the correct option is A. $34,562

You bought a stock six months ago for $80.82 per share. The stock paid no dividends. The current share price is $86.59. Required:What is the APR and EAR of your investment? (Do not round intermediate calculations. Enter your answers as a percentage rounded to 2 decimal places (e.g., 32.16).) InvestmentAPR % EAR %

Answers

Answer:

APR = 14.28%

EAR = 14.7%

Explanation:

Stock price = $80.82

Current stock price = $86.59

The return will be as below since no dividend was stated

R = ($86.59 - $80.82) / 80.82

R = 0.0714

R = 7.14%

For six months, the return was 7.14%

Annual percentage yield (APR) = 2*(7.14%) = = 14.28%. Therefore, the value of APR = 14.28%

Effective Annual Return = [1 + (Annual Rate/ N )] ^N - 1

= [1 + (14.28% / 2]^2 - 1

= [1 + 0.071]^2 -1

= 1.147 - 1

= 0.147

= 14.7%

_____ is defined as the process a company employs to externally search for and source research, new technologies, and products.

Answers

Answer:

Open innovation.

Explanation:

Open innovation can be defined as the process a company employs to externally search for and source research, new technologies, and products.

This ultimately implies that, open innovation avails business firms or companies that ability to make use of inflow and outflow of knowledge, ideas and skills to help facilitate or enhance innovation within the company, as well as expand or increase the global market for external applications of innovative technologies or knowledge.

Frederico owns a coffee shop and is required to pay sales taxes on the total amount he earns in his coffee shop. Who assessed this tax?

A. Consumer court
B.coffee suppliers
C. Local government
D. Banks

Answers

The answer is C, it is because they are the one who assess taxes.

Answer:

Local Government

Explanation:

They are the ones that assess your taxes

In every price negotiation, there is (select one):A. a ZOPA.B. a BATNA.C. a reservation price.D. all of the above.E. two of the above.F. none of the above.

Answers

Answer: D. all of the above

Explanation:

In price negotiations, the parties must have a  Zone Of Possible Agreement (ZOPA) which is a term used to describe the range in which both parties find common ground and can strike an agreement in.

There must also be a Best Alternative To a Negotiated Agreement(BATNA) which is the course of action that a party can take should negotiations with the other party break down. This BATNA will be the most advantageous alternative outside of a good deal being reached.

Then there must be a reservation price which is a price at which both parties can go no further. For the seller it is the lowest price they are willing to sell and for the buyer it is the highest they are willing to buy.

All the options are therefore in every price negotiation.

Grady exchanges qualified property, basis of $21,833 and fair market value of $26,200, for 60% of the stock of Eadie Corporation. The other 40% of the stock is owned by Pedro, who acquired it five years ago. Calculate Grady's current income, gain, or loss and the basis he takes in his shares of Eadie stock as a result of this transaction.

Answers

Answer:

$26,200

Explanation:

Current gain = Fair market value of the property - Basis of qualified property = $26,200 - $21,833 = $4367. Thus, the amount of Grady current gain is $4,367

We now determine the basis that Gredy takes for the share of Eadie stock

Basis = Original basis of qualified property + Current gain

Basis = $21,833 + $4,367

Basis = $26,200

Thus,  basis that Gredy takes for the share of Eadie stock is $26,200

1. Put the 5 steps of the communication process in order.


The Communicator encodes the their idea.


The Receiver Decodes the Message


The Communicator has an Idea.


The Communicator selects a channel for the message and sends it.


The receiver issues feedback and becomes the communicator.






2. Put the 3x3 Writing Process in order.


Analyze audience and purpose


Anticipate the audience and its reaction


Edit for Clarity


Proofread for errors


Draft first version of the message


Evaluate whether your message accomplishes its goal.


Organize information


Adapt message to audience


Research background information

Answers

Answer and Explanation:

The sequencing of the five steps in the communication process is as follows:

a. The communicator or the sender has an idea

b. After that he or she encodes that idea

c. Now the sender or communicator chooses the channel for the message and after selecting it they send it

d. After that the receiver decodes the message

e. And finally the received gives his or her feedback and he becomes the sender or communicator

Which of these best describes income tax?

regressive tax
indirect tax
direct tax
proportional tax

Answers

The income tax is a tribute or is a direct tax to the authorities that taxes the utility or income obtained by the taxpayers.

What is income tax?

It is a direct tax charge that is applied to the income, profit or benefit obtained by individuals, companies and undivided successions, in a fiscal period.

It is a direct tax because it is a direct or immediate manifestation of economic capacity, which varies according to one citizen or another, that is, according to the income obtained by each individual in a given year.

Therefore, we can conclude that the income tax is a tribute or is a direct tax to the authorities that taxes the utility or income obtained by the taxpayers.

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Indirect tax best describes income tax. The word "income tax" refers to a category of tax that governments levy on income generated by enterprises and people under their authority. Thus, option B is correct.

What is income tax?

Taxpayers are required by law to file an income tax return each year in order to establish their tax liabilities. Governments receive funding from income taxes. They are used to pay for debts owed to the government, fund public services, and supply residents with goods.

Many states and local governments impose income taxes in addition to the federal government. Some investments, such as bonds issued by housing authorities, are exempt from income taxes. A sort of tax that governments levy on the income produced by people and enterprises under their control is called income tax. Government duties, public services, and citizen goods are all paid for through income tax revenue.

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Cash receipts for January are expected to total $174,000. Cash disbursements for January are expected to be $159,500. The company's minimum desired cash balance is $13,000. It started the period with $38,000. What is the expected cash balance at the end of January?

Answers

Answer:

idek

Explanation:

One way that investors can assess the direction of the market over time is by

Answers

Answer:

i do klnot know the answer

What is the expected return on a portfolio that has $100 invested in stock 1 with an expected return of 18.0% and $45 invested in stock 2 with an expected return of 12.0%? a) 16.1% b) 16.3% c) 16.5% d) 16.7%

Answers

Answer:

Portfolio r = 0.161379 or 16.1379% rounded off to 16.1%

Option a is the correct answer

Explanation:

The expected return of a portfolio is the function of the weighted average of the individual stocks' returns that form up the portfolio. To calculate the expected rate of return of a two stock portfolio, we use the following formula,

Portfolio r = wA * rA  +  wB * rB

Where,

w is the weight of each stockr is the return on each stock

Total investment in portfolio = 100 + 45 = 145

Portfolio r = 100/145 * 0.18  +  45/145 * 0.12

Portfolio r = 0.161379 or 16.1379% rounded off to 16.1%

The separation of the ownership of the firm from the control of the firm leads to: ____________

a. debt financing.
b. an agency problem.
c. depreciation.
d. equity financing.

Answers

Answer:

D. Equity financing

Explanation:

Hope this helps!

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