ABC Corporation has the following capital structure and costs. Amount Pre-tax Cost Bonds P 3,000,000 8% Preferred Shares Ordinary Shares 1,000,000 4,000,000 10% 15% ABC 's income is taxed at 25%. 6. Based on the given information, how much is the weight average cost of capital of ABC?

Q: What are the different factors affecting the requirements of working capital? Enumerate.

A: Working Capital- It is the fund that is required by a company for managing its day -to-day working…

Q: What's the difference between the capital asset pricing model and modified capital assset pricing…

A: Capital Asset Pricing Model CAPM describes the relationship between systematic risk and expected…

Q: weighted-average cost of capital

A: Weighted average cost of the capital represents the rate on which the company would be paying to…

Q: Explain how a change in interest rates in the economy would beexpected to affect each component of…

A: Introduction:   The interest rate is the percentage value of the total borrowed amount that a…

Q: Based on the market value ratio, which ratio determine stability, earning power and capital? Explain…

A: The market value ratio is the ratio on the basis of market value and some specified performance…

Q: How does the "Net Operating Working Capital"  differ  from    "Net Working Capital "? (write only…

A: Net Operating Working Capital: It is the difference between the total long period assets and total…

Q: 2. What is the difference between Gross Working Capital and Net Working Capital? Explain your answer…

A: Gross working capital is referred as the investment of the firm in the current assets. Current…

Q: what is the answer for Jimin Parl, Capital?

A: Lets understand the basics. As per balance sheet equation, total assets are always equal to total…

Q: What are the ramifications of having Working Capital?

A: The Ramifications Of Having Working Capital Will Be Explained:

Q: What is the meaning of capital costs, how are they described, and how are they different from…

A: Capital costs are one-time expenses for the creation, improvement, or purchase of assets like…

Q: What is issued capital? How does it differ from Authorized capital?

A: Company needs the funds for business purpose. Hence, Company raise capital.

Q: What do you understand by Financial Capital ? What is the difference between Financial capital and…

A: The Answer

Q: What is earning per share? Explain its significance.

A: Earnings per share:  Earnings per share represent the amount of income earned per share of…

Q: Why are market-based weights used instead of book-value-based weights when computing the weighted…

A: Market value is that present worth of the firm or any resource in the market on which it tends to be…

Q: How is the weight in the weighted average cost of capital calculated

A: WACC = (Weight of Common stock * Cost of common stock) + (Weight of preferred stock * Cost of…

Q: How do we get the weighted average cost of capital if not given in the question?

A:

Q: The cost of capital is a hurdle rate. Is this statement true? Why or why not?

A: The question is based on the concept of minimum required rate for any project . Hurdle rate is the…

Q: Net working capital formula?

A: Net working capital is the difference between the current assets and current liabilities. It is the…

Q: The weights used in calculating the weighted average cost of capital should be based on ___

A: The Answer:

Q: A) What is cost of capital? What does it represent?   B)  Why is it important to estimate cost of…

A: Sources of Finance means from where a business or firm is taking money in order to fund out its…

Q: Does weighted average cost of capital is similar to Cost of Capital?

A: Cost of capital refers to the return expected by the company for making investments in projects or…

Q: What are two ways to determine the cost of equity?

A: Cost of equity can be measured using: CAPM and constant dividend growth model.…

Q: How did the term working capital originate?

A: Introduction: Working capital can be defined as the necessary financial resources needed by a firm…

Q: Why does net working capital appear with both negative andpositive values?

A: Working capital also known as net working capital is nothing but the difference between the current…

Q: When is WACC (weighted average cost of capital)  commonly used

A: The weighted average cost of capital represents the rate that has been expected to pay to the…

Q: Define paid-in capital

A: Definition: Stockholders’ equity: Stockholders’ equity is referred to as the claims of the…

Q: Why is the cost of capital sometimes referred to as a “hurdle rate”?

A: Cost of capital is the cost of financing a business, investment or a project. Cost of capital is…

Q: The user cost of capital does NOT depend on a. The real interest rate b. The unit price of capital…

A: The question is related to Cost of capital. The cost of capital is the minimum required rate of…