A company is 40% financed by risk-free debt. The interest rate is 10%, the expected market risk premium is 8%, and the beta of the company's common stock is 0.5. What is the after-tax WACC, assuming that the company pays tax at 20%?
Q: Financial Accounting Question no. 2 : You own 560 shares of Maslyn Tours stock that sells for $64.57…
A: Step 1: Define Dividend IncomeThe total income on a stock investment can be categorized into…
Q: Michael transfer a commercial solution general accounting question
A: Step 1: Calculate Realized Gain• Formula: Realized Gain = (FMV of Stock + Boot) - Adjusted Basis of…
Q: Financial Accounting
A: Given:Beta = 1.25Expected return on market = 14% or 0.14Risk-free rate = 6.5% or 0.065 Market risk…
Q: Do fast answer of this accounting questions
A: Step 1: Definition of Degree of Operating Leverage (DOL)The Degree of Operating Leverage (DOL)…
Q: None
A: Explanation of Contribution Margin:The contribution margin represents the amount remaining from…
Q: Not use ai solution this question answers general Accounting question
A: Step 1: Define Profit Margin (Return on Sales)Profit Margin (Return on Sales) is the percentage of…
Q: Can you please answer the accounting question?
A: Calculation of Total AssetsTotal Assets = Current Asset + Fixed Assets =…
Q: General accounting
A: Step 1: Accounting equation Assets = Liabilities + EquityEquity = Assets - LiabilitiesLiabilities =…
Q: Constant debt equity ratio? General accounting
A: The question pertains to the debt-to-equity ratio. The debt-to-equity (D/E) ratio is used to…
Q: What is the cost of goods sold? General accounting
A: Step 1: Definition of Cost of Goods Sold (COGS)COGS represents the direct costs attributable to the…
Q: Please given correct answer general accounting
A: Explanation: If an entity has securities that are classified as available for sale, then such…
Q: Can you please solve this accounting problem?
A: Step 1: Define Beginning InventoryBeginning Inventory refers to the value of goods or materials a…
Q: Equity in the business must have? General accounting
A: Step 1: Define Accounting EquationThe accounting equation is the balance sheet in linear form. It…
Q: Calculate the company's dividend yield on these financial accounting question please answer
A: Step 1: Define Dividend YieldDividend yield measures the annual dividend income relative to the…
Q: What was the company's net income for 2024?
A: Step 1: Definition of Net Income (or Loss)Net income represents the earnings of a company after…
Q: Dunbar Corporation can either purchase an asset for $38,000, which will have no value after 13…
A: Step 1: Given Value for Calculation Purchase Price of Asset = $38,000Time = t = 13Annual Lease…
Q: Financial accounting question
A: Step 1: Define Net IncomeNet income is the profit made by a company after deducting the expenses…
Q: LCM rules. Find General Account Solution.
A: To calculate the value of Browning Corporation's inventory using the Lower-of-Cost-or-Market (LCM)…
Q: What is the gross profit margin
A: Explanation of Gross Profit Margin:Gross Profit Margin is a key financial metric that indicates the…
Q: Do not round intermediate calculation ??
A: Step 1: Define Cash Conversion cycleCash conversion cycle is given as the accounts receivable period…
Q: A company purchases 250 units at $12 each and 310 units at $19 each. What is the weighted average…
A: Step 1: Calculation of Total UnitsUnits purchased at $12 = 250Units purchased at $19 = 310Total…
Q: Expert need your help
A: Step 1: Given Value for Calculation Total Liabilities = l = $677,000Total Equity = e = $532,000 Step…
Q: If a firm experience decreases in the per-unit costs of production as its network increases, then…
A: A. Economies of ScopeThe cost benefits that a company receives by manufacturing a range of goods…
Q: What is the total assets turnover?
A: Calculation of Total Assets (in millions)Total Assets = Current Assets + Accounts Receivables + Cash…
Q: Hii expert please given correct answer general accounting
A: Step 1: Define Creditors"Creditor" is a term used to describe those entities to whom an enterprise…
Q: None
A: Explanation: In the given case, it is stated that on Jan 15, Year 1, a company purchased 10 shares…
Q: Kindly help me with accounting questions
A: Step 1: Definition of Profit Margin RatioThe profit margin ratio measures how much operating income…
Q: Kindly help me with accounting questions
A: Step 1: Definition of Variable Costs of SalesVariable costs of sales represent the costs that change…
Q: I need answer of this accounting questions
A: Interest revenue = Principal x Annual interest rate x Period 2024 = 6 months (July 1 - December 31,…
Q: Calculate the standard cost per unit for ABC company??
A: Step 1: Define Standard costsThe standard costs are determined to calculate the per unit cost of the…
Q: Need answer
A: The question requires the determination of the ROE and the ROIC.Return on equity (ROE) is a…
Q: What is the asset turnover ratio for 2015 ??
A: Step 1: Define Asset Turnover RatioAn efficiency ratio that analyzes the potential of a company's…
Q: General Account
A: To calculate the equivalent units of production (EUP) for the Sewing Department using the weighted…
Q: On January 1, Year 1, Savor Corporation leased equipment to Spree Company. The lease term is 9…
A: Annual Lease Payment Schedule:: The first payment of $698,000 is made at the start of the lease…
Q: During periods of rising prices which of the following is true:(Accounting)
A: The correct answer is:A) Prof Gear's Inventory is closer to replacement costs and its COGS is lower…
Q: Net Income reported under variable costing will exceed net income reported under full costing during…
A: The correct answer is:a. The number of units sold exceeds the number of units produced during the…
Q: cost account
A: To perform the outsourcing analysis, we compare the relevant costs of making the switches in-house…
Q: Don't use ai given answer accounting questions
A: Step 1: Definition of High-Low MethodThe high-low method is a technique used to estimate the fixed…
Q: Subject: Financial Accounting A company has the following information: 1) Net sales: $2,54,000 2)…
A: Step 1: Formula Earnings per share = Net income/Outstanding shares Step 2: Net income Net income =…
Q: On July 1, the accounts receivable account balance was $77,500. During July, $335,000 was collected…
A: Explanation of Accounts Receivable:Accounts receivable represents the amount owed by customers for…
Q: Given answer accounting questions
A: The Degree of Operating Leverage (DOL) can be calculated using the formula:DOL=%Change in Net…
Q: Provide correct answer general Accounting
A: Step 1: Define Deferred Tax AssetsInternal Revenue Service states that by reducing the current…
Q: Choose the correct option
A: Explanation of Cost Principle:The Cost Principle states that assets must be recorded in financial…
Q: What's the solution
A: We have to find the ending work in process inventory, by useing the given information :Beginning…
Q: Calculate it's gross profit?
A: The calculation of Gross Profit is as follows:Gross Profit = Sales - Cost of Goods Sold…
Q: Expert help me to solve in this account query....
A: To solve this question, we use the accounting equation and the statement of retained earnings…
Q: Financial Accounting Question
A: Step 1: Define Economic Order Quantity (EOQ)The Economic Order Quantity (EOQ) is the optimal order…
Q: What should SA's dividend payout ratio be this year on these financial accounting question?
A: Step 1: Define Dividend Payout Ratio:The Dividend Payout Ratio is a financial metric that measures…
Q: 4 MARKS
A: Concept of Liabilities: Liabilities are financial obligations or debts a company owes to external…
Q: Kindly help me with accounting questions
A: Step 1: Definition of Gross ProfitGross profit is the financial metric representing the difference…
Financial Accounting
Step by step
Solved in 2 steps
- A company is 48% financed by risk-free debt. The interest rate is 9%, the expected market risk premium is 7%, and the beta of the company's common stock is 0.58. What is the after-tax WACC, assuming that the company pays tax at a 35% rate? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Answer is complete but not entirely correct. After-tax WACC 13.06 %Harmony Sego has a tax rate of 21%, the interest rate on debt is 10%, and the WACC is 15%. If the debt ratio is 60% (i.e., the weight on debt), what is the expected rate of return to equity holders? O 12.50% O 22.50% O 25.65% O 21.25%An all equity financed company currently has a beta of 1.2 and a marginal tax rate of 20%. The expected return on the market is 8%. The risk-free rate of return is 3%. The company's before-tax cost of debt is 5%. The company decides to alter its capital structure and will target 50% debt, which will remain constant. What is this company's new weighted average cost of capital (WACC)? a) 6.5% b) 7.7% c) 8.9% d) 10.2%
- Your firm has a target debt ratio of 30%. Cost of debt (RB) is 6%. The risk-free rate is 3% and the expected market risk premium is 6%. Your firm's unlevered (asset) beta is 1. What is the appropriate rate to discount the interest tax shields associated with your debt? 10.00% 11.57% 6.00% 9.00% 4.00%Your firm has a target debt ratio of 30%. Cost of debt (Rb) is 6%. The risk-free rate is 3% and the expected market risk premium is 6%. Your firm's unlevered (asset) beta is 1. What is the appropriate rate to discount the interest tax shields associated with your debt? Only typed answerA company has a WACC of 10%. It can borrow at 4%. Assume that the company has a target capital structure of 60% equity, 40% debt. The corporate tax rate is 20%. Based on MM Theory with taxes, what is the cost of equity? What is the WACC?
- A company has a beta of 1.4, pre-tax cost of debt of 5.9% and an effective corporate tax rate of 25 %. 44% of its capital structure is debt and the rest is equity. The current risk - free rate is 0.6% and the expected market risk premium is 6.0%. What is this company's weighted average cost of capital? Answer in percent, rounded to two decimal places.Alpha Inc.'s beta coefficient is 1.4, the risk-free rate is 10 percent, and the market risk premium is 5 percent. Based on the capital asset pricing model (CAPM), what should be Alpha's cost of retained earnings? 11% 17% 16% 12%Rolex, Inc. has equity with a market value of $20 million and debt with a market value of $10million. Assume the firm has no default risk and can borrow at the risk-free interest rate. Therisk-free interest rate is 5 percent per year, and the expected return on the market portfolio is11 percent. The beta of the company's equity is 1.2. The tax rate is 20%. What is the cost ofcapital for an otherwise identical all-equity firm? handwrite please
- Rolex, Inc. has equity with a market value of $20 million and debt with a market value of $10million. Assume the firm has no default risk and can borrow at the risk-free interest rate. Therisk-free interest rate is 5 percent per year, and the expected return on the market portfolio is11 percent. The beta of the company's equity is 1.2. The tax rate is 20%. What is the cost ofcapital for an otherwise identical all-equity firm?A firm's unlevered beta is 0.5 and tax rate is 30%. If it is with 20% debt. What is the firm's levered beta? 0.9012 1.2533 0.5875 0.6235A company has a beta of 1.8, pre-tax cost of debt of 5% and an effective corporate tax rate of 20%. 40% of its capital structure is debt and the rest is equity. The current risk-free rate is 1.5% and the expected market return is 5.5%. What is this company's weighted average cost of capital? Answer in percent, rounded to one decimal place.