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
- Answer? ? Financial accountingA 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%
- I need correct answer general accounting questionA 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.
- 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 pleaseRolex, 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 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.
- I am searching for the correct answer to this general accounting problem with proper accounting rules.A firm has an expected return on equity of 16% and an after-tax cost of debt of 8%. What debt-equity ratio should be used in order to keep the WACC at 12%? 0.75:1 1.50:1 O 1:1 0.50:1Don ‘s Pharmaceuticals cost of debt is 7%. The risk-free rate of interest is 3%. The expected return on the market portfolio is 8%. After effective taxes, Corcovado’s effective tax rate is 25%. Its optimal capital structure is 60% debt and 40% equity. a. If Don’s beta is estimated at 1.1, what is its weighted average cost of capital? b. If Don’s beta is estimated at 0.8, significantly lower because of the continuing profit prospects in the global energy sector, what is its weighted average cost of capital? NB: Answer question A and B