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Genrish500
10 days ago
14

Sapp Trucking's balance sheet shows a total of noncallable $45 million long-term debt with a coupon rate of 7.00% and a yield to

maturity of 6.00%. This debt currently has a market value of $50 million. The balance sheet also shows that the company has 10 million shares of common stock, and the book value of the common equity (common stock plus retained earnings) is $65 million. The current stock price is $22.50 per share; stockholders' required return, rs, is 14.00%; and the firm's tax rate is 40%. The CFO thinks the WACC should be based on market-value weights, but the president thinks book weights are more appropriate. What is the difference between these two WACCs?
Business
1 answer:
Katen [3.2K]10 days ago
4 0
The difference in the two WACCs is 1.2%.
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Brief Exercise 6-02 Tamarisk, Inc. took a physical inventory on December 31 and determined that goods costing $190,000 were on h
harina [3546]
Tamarisk should report an inventory amount of $252,000 as of December 31. To arrive at this figure, consider the following calculation: Inventory = Stock on hand + goods acquired from Sheffield Corp + goods sold to Wildhorse Co. This gives us the calculation: $190,000 + $29,000 + $33,000 = $252,000. All relevant amounts were taken into account, including considerations for FOB destination and FOB shipping point, which contribute to the physical inventory count.
4 0
23 days ago
Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a
Mariulka [3472]

Answer:

Follow the instructions provided below.

Explanation:

Given the data:

The selling price of the company's ball is $25.

Variable cost per item= $15.00

Fixed costs= 426,000

The contribution margin ratio is the percentage of sales contributing to fixed costs. It is calculated using:

Contribution margin ratio= (selling price - unit variable cost)/selling price

Contribution margin ratio= (25 - 15)/25= 0.4

Break-even units= fixed costs/ contribution margin

Break-even units= 426,000/10= 42,600 units

The degree of operating leverage quantifies the change in income relative to sales fluctuations.

Degree of operating leverage= total contribution margin / (total contribution margin - fixed expenses)

Degree of operating leverage= (62,000*10) / [(62,000*10) - 426,000]

Degree of operating leverage= 3.20

6 0
27 days ago
All of the following are true about the project scope statement EXCEPT:a.It is an output of the Verify Scope process. b.It descr
Free_Kalibri [3489]

Answer:

a. This is a result of the Validate Scope process.

Explanation:

The project scope statement serves as a resource that outlines the key deliverables of a project, detailing essential milestones, all necessary requirements, constraints, and assumptions. It thoroughly explains the deliverables of the project along with the necessary work needed to accomplish those deliverables. Additionally, it facilitates a shared understanding of the project scope among stakeholders. Furthermore, it might include clear exclusions from the scope that can help in aligning stakeholder expectations. It is a product of the scope management process and not the verify scope process, meaning that all other choices are valid while option "a" is incorrect.

7 0
14 days ago
Suppose Nicholas owns a business making Christmas tree ornaments. Currently, he makes 300 ornaments a month. At this level of pr
stepan [3272]

Solution and Explanation:

1. MC = Cost of raw materials + Labor cost

MC = 5 plus (10 divide by 2)

MC = $10

2.  TFC = $300

Q = 300,  AFC = TFC/Q = 300 divide by 300 = $1

3.  Nicholas's optimum output is likely to be greater

Rationale: P = MR = $15, MC = $10

With MR exceeding MC, increasing output is advisable until MR equals MC to maximize profits.

4.  His profit-maximizing output would likely increase

Reason: P = MR = $15, MC = $4 + $5 = $9

Since MR > MC, Nicholas should amplify his output until they are equated at the profit-maximizing point.

3 0
1 month ago
You bought 200 shares of Stock A at $23.00 per share 6 months ago. It is now worth $47 per share. What was the percent of increa
Katen [3225]

Answer:

51 % growth

Explanation:

Stock A initial price= $23.00

Stock A price after 6 months= $47.00

Stock A price increase= $47 - $23

                              = $24

Percentage change in stock price = $24  x  100%

                                                        $47

                                                     = 0.510 x 100%

                                                     = 51%

The stock price of Stock A has risen by 51%

Cheers

4 0
1 month ago
Read 2 more answers
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