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NEW QUESTION: 1
A company has determined that its optimal capital structure consists of 40 percent debt and 60 percent equity. Given the following information, calculate the marginal weighted average cost of capital when the capital budget is $40,000.
k(d) (interest rate on the firm's new date) = 10%
Net income = $40,000
Payout ratio = 50%
Tax rate = 40%
P(0) = $25
Growth = 0%
Shares outstanding = 10,000 Flotation cost on additional equity = 15%
A. 7.20%
B. 8.05%
C. 14.28%
D. 11.81%
E. 13.69%
Answer: B
Explanation:
Explanation/Reference:
Explanation:
First, find the amount of equity and debt needed for a $40,000 budget:
Debt = 0.4 x $40,000 = $16,000; Equity = 0.6 x $40,000 = $24,000.
We can find the amount of retained earnings = Net Income(1 - Payout ratio), or RE = $40,000 x 0.5
$20,000.
We will need to find the cost of new common equity, because we have only $20,000 of equity on hand, and we need $4,000 more!
Find the dividend, Do = [(0.5) $40,000]/# of Shares = $20,000/10,000 = $2.00.
Then, find the cost of new equity: k(e) = D1/[P0(1 - F)] + g = $2.00/[$25(1 - 0.15)] + 0% = 0.0941 = 9.41%.
Finally, calculate WACC, using k(e) = 0.0941, and k(d) = 0.10, so
WACC = (D/A)(1 - Tax rate)k(d) + (E/A)k(e)
WACC = 0.4(1 - 0.4)(0.10) + 0.6(0.0941) = 0.0805, or 8.05%.

NEW QUESTION: 2
You are a Microsoft Dynamics 365 system administrator.
You need to configure Microsoft Dynamics 365 and Microsoft Exchange Online to work together so that users can automatically track incoming email messages.
Which three steps should you perform? Each correct answer presents part of the solution.
A. Configure mailboxes and approve email.
B. Use correlation to track email conversations.
C. Configure the email server profile.
D. Configure appointments, contacts, and tasks on a Microsoft Dynamics 365 mailbox record.
E. Configure incoming email to server-side synchronization or Email Router.
Answer: A,B,E

NEW QUESTION: 3

A. Option A
B. Option D
C. Option B
D. Option C
Answer: A

NEW QUESTION: 4
Given the procedure show below: What will be the value of P2?

A. 0
B. 1
C. 2
D. 3
Answer: B