Answer: 9.48%
Explanation:
Given Data
Debts ;
$7 billion
$2 billion
$13 billion
Beta of Fords stock = Beta = 1.50
Market risk premium = Rp = 8.0%
Risk free rate of interest = Rf = 4.0%
Equity rate = 1.7
Market risk rate = 0.8
Risk free rate = 0.03
Therefore;
Cost of Equity ( Re ) = Risk free rate + equity rate × market risk premium
= 0.03 + (1.7 × 0.8)
= 0.166
Preferred Stock Cost ( PSC)= Dividend ÷ stock price
= 4 ÷ 30
= 0.1333
Total debt = 13 + 6 + 2 = 21 billion
D% = 13 billion ÷ 21 billion
= 0.619
E% = 6 billion ÷ 21 billion
= 0.286
P% = 2 billion ÷ 21 billion
= 0.095
RD = debt capital at 8% maturity rate
Tc= 30%
Rwac =(w/ preferred stock)
= Re × E% + PSC × P% + Rd ( 1- Tc) D%
Rwac = (0.166)(0.286) + (0.1333)(0.095) + (0.08)(1- 0.3)*(0.619)
= 0.094803 * 100
= 9.48%
At 30% tax rate Ford weighted average cost is 9.48%
Answer: 1.50
Explanation:
Isabel's portfolio beta is a weighted average of the individual stock betas.
= Weight of stock A * Stock A beta + Weight of stock B * Stock B beta + Weight of stock n * Stock n beta
= (20% * 0.4) + (30% * 1.2) + ( 25% * 2.5) + (25% * 1.75)
= 0.08 + 0.36 + 0.625 + 0.4375
= 1.5025
= 1.50
Answer:
<u>lower return </u>
Explanation:
an additionl unit of capital will have a <u>lower return</u> in Alpha compared to Beta
The diminishing return theory explains that if a factor is added, while the other remains the same, the return for each additional quantity added will be lower. So if both countries have the same amount of factor, Alpha adding more capital will not have the same return as doing it in Beta
ΔCapital/(40,000 + labor + land) < ΔCapital/(5,000 + labor + land)
That's because the divisor ir greater in Alpha it is required a higher amount of capital to produce the same return.
Answer:
<u>Elevated blood cholesterol level.</u>
Explanation:
Ben is more likely to show a elevated blood cholesterol level, as his overwork regime most often causes a sedentary lifestyle and poor diet.
Cholesterol is a lipid found naturally in the human body and is responsible for being the structural component of membranes throughout the body, it is used to produce vitamin D, hormones and bile acids for the digestion of fat. The liver makes 70% of cholesterol and the other 30% comes from the diet.
When it is above the recommended level, cholesterol can accumulate on the walls of the arteries and cause various heart diseases, such as angina, heart attack and stroke.
Therefore, to maintain blood cholesterol levels, it is necessary to adopt a healthy and balanced diet, in addition to the practice of physical exercises.
Answer:
Explanation:
(a) The computation of the cost of goods sold is shown below:
= Beginning inventory + Purchase of new merchandise - ending inventory
= $4,000 + $22,000 - $4,500
= $21,500
(b) In the income statement, the total revenues and the total expenses are recorded.
If the total revenues are more than the total expenditure then the company earns net income
And, If the total revenues are less than the total expenditure then the company have a net loss
This net income or net loss would reflect in the statement of the retained earning account.
The preparation of the income statement is presented in the spreadsheet. Kindly find the attachment below:
