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Minchanka
11 days ago
7

For a typical firm, which of the following sequences is CORRECT? All rates are after taxes, and assume that the firm operates at

its target capital structure. (rs=return on equity, cost of equity; rd=return on debt, cost of debt; WACC=weighted avg. cost of capital)
A) rs > rd > WACC.

B) rs > WACC > rd.

C) WACC > rs > rd.

D) rd > rs > WACC.
Business
1 answer:
Katen [2.9K]11 days ago
6 0
The right sequence is B) rs > WACC > rd. The equation to calculate WACC is as follows: = Weightage of debt × cost of debt × (1- tax rate) + (Weightage of preferred stock) × (cost of preferred stock) + (Weightage of common stock) × (cost of common stock). It is known that equity carries more risk compared to debt, and returns on equity are viewed as interest, while for debt it is regarded as dividends. Additionally, the WACC is situated between debt and equity.
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n important consideration in the selection of a strategy is the ability of each alternative to satisfy agreed-upon objectives wi
Katen [2925]

Response: the VRIO framework

Clarification:

VRIO represents value, rarity, imitability, and organization. These four components are utilized to assess if a business possesses a competitive edge over other firms

It is important to highlight that the VRIO framework serves as an internal instrument for organizations.

3 0
10 days ago
Which of the following is an example of external-operational communication?
Mariulka [3182]

Response:

c. Advertisements published by companies on their websites for the general public

Explanation:

External-operational communication is characterized as dialogue, interaction, or correspondence related to work that a business entity conducts with individuals or groups, such as customers, government bodies, suppliers, etc., external to the organization.

An example of external-operational communication is the advertisements that companies display on their websites targeting the general public.

4 0
13 days ago
Assume Baldwin Corp. is downsizing the size of their workforce by 15% (to the nearest person) next year from various strategic i
marusya05 [3096]

Answer:

The organization will incur $5,100 for each employee regarding separation fees should these exit interviews take place next year

Explanation:

Information provided in the question:

Expected reduction in staff = 15% = 0.15

Cost of conducting exit interviews = $100

Standard separation cost = $5,000

Now,

Total separation cost for each employee = Cost of exit interviews + Standard separation cost

= $100 + $5,000

= $5,100

Therefore,

The organization will incur $5,100 for each employee regarding separation fees should these exit interviews take place next year

3 0
1 month ago
Do you dislike waiting in line? supermarket chain kroger has used computer simulation and information technology to reduce the a
Mariulka [3182]

Answer:

Part a:

Show the probability density function for the waiting times at Kroger, assuming they are exponentially distributed.

Solution:

Probability density function f(x) = (1/ )*e-x/  = (1/26)*e-x/26 (result)

Part b:

Calculate the probability that a customer waits between 15 and 30 seconds.

Solution:

0.2462

Part c:

Determine the probability that a customer must wait longer than 2 minutes.

Solution:

0.0099

Explanation:

All calculations are included.

3 0
1 month ago
Wilson Co. is considering two mutually exclusive projects. Both require an initial investment of $10,000 at t = 0. Project X has
Nady [2956]

Answer:

d. $1,376.74

Explanation:

The NPV for Project X is calculated as follows:

Year Cash outflow/inflow Present value factor      Present value

0              -$10,000.00                         1                   -$10,000.00

1                 $6,000.00                   0.900901              $5,405.41

2                 $8,500.00                     0.811622              $6,898.79

NPV                                                                        $2,304.20

For Project Y, the NPV is:

Year Cash outflow/inflow Present value factor      Present value

0                -$10,000.00                       1                   -$10,000.00

1                   $4,600.00              0.900901             $4,144.14

2                   $4,600.00                  0.811622             $3,733.46

3                    $4,600.00                   0.731191                   $3,363.48

4                    $4,600.00                  0.658731             $3,030.16

Total                                                                        $4,271.25

The formula for calculating Equivalent Annual Annuity is expressed as:

C = r*(NPV)/(1-(1+r)-n)

For Project X, where NPV = $2304.20

using r = 11% and n = 2

Plugging in values into the formula gives us:

C = 11%*$2304.20/(1-(1+11%)−2

    =$1345.38

For Project Y, where NPV = $4271.25

using r = 11% and n = 4

Inserting the values into the formula, we find C = 11%*$4271.25/(1-(1+11%)−4

   = $1376.74

Thus, the more profitable project is Y, with an equivalent annual annuity of $1376.74.

8 0
8 days ago
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