A structured methodology is process-oriented and develops in a step-by-step technique, with each step building on the previous one. The correct answer is D. structured.
The work of structured methodology is to provide a frame-work within which the systems development can produce an effective solution to a business problem which requires the use of a computer system and a set of techniques. Structured analysis refers to a method of development in which permission is given to the analyst to understand and know about the system and all of its activities in a logical way. It is a graphic that is used to specify the presentation of the application.
Thus, a structured methodology is process-oriented and develops in a step-by-step technique, with each step building on the previous one. The correct answer is option D.
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Company X is expected to pay a dividend of $4 next period, anddividends are expected to grow at 6% per year. The required returnis 16%. What is the current price? What is the price expected to bein
The current price of Company X's stock is $40. Meanwhile, the price expected to be in year 4 is $50.50.
To calculate the current price of Company X's stock, we can use the dividend discount model:
Current Price = [tex]\frac{\text{Dividend}}{\text{Required Return} - \text{Dividend Growth Rate}}[/tex]
Current Price = [tex]$\frac{4}{0.16-0.06}$[/tex]
Current Price = $4 / 0.1
Current Price = $40
Therefore, the current price of Company X's stock is $40.
To calculate the price expected to be in year 4, we can use the same formula, but we need to use the expected dividend and growth rate in year 4:
Expected Dividend in year 4 = $4 x (1 + 0.06)⁴ = $4 x 1.262 = $5.05
Price in year 4 = [tex]\frac{Expected Dividend_{4}}{Required Return - Dividend Growth Rate}[/tex]
Price in year 4 = [tex]$\frac{5.05}{0.16 - 0.06}$[/tex]
Price in year 4 = $5.05 / 0.1
Price in year 4 = $50.50
Therefore, the price expected to be in year 4 is $50.50.
The complete question:
Company X is expected to pay a dividend of $4 next period, and dividends are expected to grow at 6% per year. The required return is 16%. What is the current price? What is the price expected to be in year 4?Learn more about growth rate: https://brainly.com/question/31366616
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t which method of calculating inventory cost is used to estimate the amount of ending inventory? a. last in, first out (lifo) b. first in, first out (fifo) c. weighted average method d. gross profit method
The first in first out (FIFO) method of calculating inventory cost is used to estimate the amount of ending inventory. Thus, the accurate answer is option (B).
First in, first out, or FIFO, is an uncomplicated technique of inventory valuation based on the presumption that the first items bought or produced are sold first. This implies that older inventory is distributed to customers before fresh inventory, in theory.
To determine the number of units in ending inventory at the conclusion of each accounting period, the corporation performs a physical count. The cost of ending inventory is then calculated using the first-in, first-out (FIFO) technique by the company.
Therefore, option B is the appropriate response.
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The Gross Profit Method is used to estimate the cost of ending inventory. This method is suitable when a physical inventory count isn't feasible or a prompt inventory cost estimate is needed for accounting purposes.
Explanation:The method of calculating inventory cost that is used to estimate the amount of ending inventory is the Gross Profit Method. This method is used when a physical count of the inventory is impracticable or when an immediate estimate of inventory cost is required for financial reporting purposes.
Under the gross profit method, the cost of goods available for sale is assumed to be the sum of the beginning inventory and the cost of goods purchased. The gross profit is then estimated based on historical profit margin percentages, and this estimate is subtracted from the cost of goods available for sale to approximate the cost of the Ending Inventory. For instance, if the beginning inventory is $10,000, the cost of goods purchased is $30,000, and the gross profit margin is 40%, the estimated cost of ending inventory would be $24,000 (($10,000+$30,000)×(1-0.40)).
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the corporate officer identified who has custody of the company's funds and is generally responsible for planning and controlling the company's cash position is the:
The corporate officer who has custody of the company's funds and is responsible for planning and controlling the company's cash position is known as the Chief Financial Officer (CFO).
The CFO is a high-level executive who oversees the financial operations of the company, including financial planning, budgeting, accounting, and reporting. They also manage the company's investments, debt, and other financial resources to ensure the company has enough cash to operate and grow.
The CFO works closely with other senior executives, such as the CEO and COO, to make strategic financial decisions that impact the company's future. They must have a strong understanding of financial markets, accounting principles, and business operations to effectively manage the company's financial position. The CFO is also responsible for ensuring the company complies with all financial regulations and reporting requirements.
In summary, the CFO is the corporate officer who has custody of the company's funds and is responsible for planning and controlling the company's cash position. They play a critical role in ensuring the financial health and success of the company.
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How much must be deposited at the end of each quarter for 7.5
years to accumulate to $27000.00 at 6.84% compounded monthly?
The amount that must be deposited at the end of each quarter for 7.5 years to accumulate to $27,000.00 at an interest rate of 6.84% compounded monthly is approximately $2,880.38.
How much must be deposited?To calculate the amount that must be deposited at the end of each quarter to accumulate to a total of $27,000.00 over 7.5 years at an interest rate of 6.84% compounded monthly, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
where:
A = the total amount accumulatedP = the principal amount (the deposit to be made at the end of each quarter)r = the annual interest rate (in decimal form)n = the number of times interest is compounded per yeart = the time period for which the interest is compounded (in years)In this case, the interest is compounded monthly, so n = 12 (12 months in a year), and the time period is 7.5 years.
Plugging in the given values:
A = $27,000.00
r = 6.84% or 0.0684 (in decimal form)
n = 12
t = 7.5 years
We can now solve for P:
27,000 = P(1 + 0.0684/12)^(12*7.5)
Dividing both sides by (1 + 0.0684/12)^(12*7.5), we get:
P = 27,000 / (1 + 0.0684/12)^(12*7.5)
Using a calculator, we can evaluate the right-hand side of the equation to find the value of P:
P = 27,000 / (1.005698763)^(90)
P ≈ $2,880.38
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A) A project manager is evaluating whether it is economical to develop a project requiring expenditures at time zero of $20,000 for land, $30,000 for inventory working capital, $80,000 for a steel building, $240,000 for equipment, and $60,000 for vehicles. Starting in year one the manager estimates that production will generate annual end-of-year escalated revenue of $500,000 with escalated operating costs of $300,000. Operating costs and revenue will both escalate at a compound interest rate of 10% per year beginning in year two. Use straight-line depreciation over 39 years for the building cost starting in year one assuming 12 months of service when computing your allowable deduction in year one under the mid-month con- vention. Use 7-Year MACRS depreciation rates for the qualifying equipment cost starting in year one with the half-year convention and the 5-Year MACRS rates for the vehicle cost, again, starting in year one with the half-year convention. The effective combined federal and state income tax rate is 25%. No other income exists against which to utilize deductions so carry any losses forward. B) Calculate the project cash flows for the first four years of this business and also consider the after-tax cash flow that would be realized if the business were to be sold at the end of year four for a sale value of $600,000. Write off all remaining tax book values at the end of year four to deter- mine taxable gain (or loss) and treat the sale as ordinary income. For a minimum after-tax rate of return of 15%, calculate the overall project after-tax NPV, DCFROR, and PVR.
A) The project requires initial expenditures of $20,000 for land, $30,000 for inventory working capital, $80,000 for a steel building, $240,000 for equipment, and $60,000 for vehicles.
The project generates annual escalated revenue of $500,000 with escalated operating costs of $300,000 starting in year one, and both revenue and costs escalate at a compound interest rate of 10% per year beginning in year two.
Straight-line depreciation is used over 39 years for the building cost starting in year one, with 12 months of service under the mid-month convention. The effective combined federal and state income tax rate is 25%.
B) The project cash flows for the first four years, including the after-tax cash flow from selling the business at the end of year four for $600,000, need to be calculated.
All remaining tax book values should be written off at the end of year four to determine the taxable gain (or loss), and the sale should be treated as ordinary income. Using a minimum after-tax rate of return of 15%, the overall project after-tax NPV, DCFROR, and PVR can be calculated.
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A company's formal and informal arrangements of tasks, responsibilities, and lines of authority and communications make up the company's _organizational structure. (true or false)
The given statement "A company's formal and informal arrangements of tasks, responsibilities, and lines of authority and communications make up the company's organizational structure." is True.
Organizational structure refers to the formal and informal arrangements of tasks, responsibilities, lines of authority and communication within a company. It defines the relationships among different positions and departments in an organization and how information flows between them. A well-designed organizational structure can help a company achieve its goals and objectives by clarifying roles and responsibilities, improving efficiency, and reducing conflicts. On the other hand, a poorly designed organizational structure can lead to confusion, inefficiency, and even failure.
The formal aspect of organizational structure includes the hierarchical arrangement of positions and reporting relationships, job descriptions, and the distribution of authority and decision-making power. The informal aspect refers to the social network of communication and relationships that exist within the organization, such as friendships, cliques, and informal channels of communication.
A company's organizational structure can be influenced by various factors such as its size, culture, strategy, and environment. It can be designed to be centralized, decentralized, or matrix, depending on the needs of the company. Ultimately, a well-designed organizational structure can help a company achieve its goals and objectives by clarifying roles and responsibilities, improving efficiency, and reducing conflicts.
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Customers should be billed for back-orders when a. The back-ordered goods are shipped b. The original goods are shipped c. Customers are not billed for back-orders because a back-order is a lost sale
When the items on backorder are dispatched, customers should be invoiced. Here option A is the correct answer.
This is because a back-order represents a delayed fulfillment of the customer's original order, and the customer has agreed to wait for the goods to become available. Billing the customer at the time of shipment ensures that the business receives payment for the goods, and it also helps to manage cash flow and accounts receivable.
Billing the customer when the original goods are shipped could create confusion and potential disputes over timing and pricing. If the back-ordered goods have a different price than the original goods, the customer may be surprised by the final bill and feel misled.
It is not recommended to refrain from billing for back-orders because a back-order is considered a lost sale. While it is true that some customers may cancel their back-orders if the wait time is too long, many customers are willing to wait for the goods to become available. By billing customers when the back-ordered goods are shipped, businesses can ensure they receive payment for goods that the customer has agreed to purchase.
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C-2. For each predictor variable, state the p-value and determine whether the predictor variable is significant in explaining Time
In linear models, predictor p-values provide a pointer to the statistical significance of a predictor coefficient value; they measure the likelihood that a randomly shuffled model could have produced a coefficient as large as the fitted value.
A low p-value (0.05) suggests that the null hypothesis can be rejected. In other words, a low p-value predictor is likely to be a useful addition to your model because changes in the predictor's value are associated to changes in the response variable. If the P-value is less than 0.05, we can reject the null hypothesis and infer that the variables are related.
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east coast yachts goes international what are the implications for this approach?how can the company hedge its exchange rate risk? what are the implications for this approach?
If East Coast Yachts decides to expand internationally, they will need to consider the implications of this approach. One of the main implications is the exposure to exchange rate risk. This risk arises because the company will be conducting business in foreign currencies, which can fluctuate in value compared to the US dollar.
To hedge its exchange rate risk, East Coast Yachts can use various financial instruments such as currency forwards, options, and swaps. These tools allow the company to lock in an exchange rate for a future date, reducing the uncertainty associated with foreign currency transactions. By hedging its exchange rate risk, the company can mitigate potential losses and improve its financial stability.
However, there are also implications to consider when using these hedging instruments. For example, they can be costly and require specialized expertise to manage effectively. Additionally, if the company overestimates the amount of foreign currency it will need to purchase or sells too many forward contracts, it could end up losing money if the exchange rate moves in a different direction than anticipated.
Overall, while expanding internationally can offer significant growth opportunities, East Coast Yachts must carefully consider the implications of this approach, including the risks associated with exchange rate fluctuations and the costs and complexities of hedging against them.
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which of the statements below about the fed is not true? the fed is controlled by the u.s. government. the fed can loan money to private banks as lender of last resort. regional federal reserve banks act as central banks for their areas. federal reserve banks control the money supply.
The Federal Reserve Act, approved by Congress in 1913, established the Federal Reserve System, also known as the "Fed," and it went into effect in 1914. The correct answer is a. the fed is controlled by the u.s. government.
It resembles all central banks exactly. The Federal Reserve is a branch of the American government. The Fed Reserve System has the following duties: - It has the authority to oversee and control banks; - They support societal objectives like economic growth, low inflation, and the smooth operation of financial markets (monetary policies).
The "lender of last resort" is the Federal Reserve. The Federal Reserve Act, enacted by Congress in 1913, established the Federal Reserve System (the "Fed"). In 1914, the Fed started operating. President Woodrow Wilson established it as part of the Federal Reserve Act, which aimed to support all banks and put an end to the bank panics of the 1800s. Controlling the issuance of money in the United States of America (it supports public goals such as economic growth, low inflation, and the smooth operation of financial markets) The Federal Reserve, like all central banks, is a government agency with the following duties.
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required information skip to question [the following information applies to the questions displayed below.] required: 1. create a new column in the purchase orders table for state sales tax. use the vlookup function to match supplier st to the state in the sales tax table. 2. create a new column in the purchase orders table that provides the calculation for the amount of state sales tax owed on each line item. ask the question: how can we incorporate sales tax into each transaction line item without having to do so manually? master the data: the 4-2 alt data is purchasing data rather than sales, so instead of working with store location, you will work with supplier st. keep in mind there are different columns available in this dataset, so your vlookup and calculation columns will be in columns j and k and will reference different sections of the spreadsheet. software needed excel screen capture tool (windows: snipping tool; mac: cmd shift 4) data: lab 4-2 alt data.xlsx. perform the analysis: refer to lab 4-2 alternate in the text for instructions and lab 4-2 steps for each the of lab parts. share the story: you have now worked with connecting data in excel stored in two different tables and retrieving the data from one table into another to add descriptive attributes to your transaction table. required: 1. what is the total state tax owed for each line item in the purchase order table? multiple choice 1 $8.41 $687.21 $841.67 $5446.16 2. what is the state tax owed on purchase order id 20510? multiple choice 2 $95.00 $14.29 $42.25 $21.80 3. what is the state sales tax owed on purchase order id 20525? (note- there are multiple line items on this invoice. round if necessary.) multiple choice 3 $31.78 $19.50 $0.20 $14.62 4. what is the state sales tax rate for minnesota? multiple choice 4 0.065 0.04 0.0725 0.06875 5. for the second argument in a vlookup function, do you typically select one cell, a full column, or an entire table array? multiple choice 5 full column it depends one cell entire table array p
The questions are related to a data analysis task that involves using the VLOOKUP function in Excel to match and retrieve data from one table to another.
Specifically, the task involves adding state sales tax information to a purchase orders table by matching the supplier's state with the state in the sales tax table and calculating the amount of state sales tax owed for each line item.
The state sales tax owed for each line item in the purchase order table is $8.41.
The state tax owed on purchase order id 20510 is $14.29.
The state sales tax owed on purchase order id 20525 is $31.78.
The state sales tax rate for Minnesota is 0.0725.
For the second argument in a vlookup function, you typically select either one cell or a full column.
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a(n) _________ contains 100 or fewer stockholders and can elect to be treated as a partnership for tax purposes. the stockholders have limited liability.
A "corporation" contains 100 or fewer stockholders and can elect to be treated as a partnership for tax purposes. The stockholders have limited liability.
The stockholders are those group or individual who holds the share-holding or equity-holding in the company in which they buy stocks or shares.
In the workplace, status incongruence can occur when a supervisor earns less than subsidiaries, which can lead to negative or bad consequences such as low job satisfaction, low morale, and so on.
The supervisor is also struggle to assert their authority and maintain their position of leadership.
Therefore, it a corporation contains 100 or fewer stockholders and can elect to be treated as a partnership for tax purposes.
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Calculate the future value of a $5,000 annuity that you will invest at the end of each of the next 15 years, assuming you can earn a 10% compounded annual return. Compare that result with the future value assuming that the amounts are deposited at the beginning of each period (annuity due).
The future value of the annuity due is $167,260.
By comparison the annuity due results in a higher future value due to the additional compounding.
How to calculate the future value of an annuity?To calculate the future value of an annuity, we can use the following formula:
FV = Pmt x ((1 + r)^n - 1) / r
Where:
Pmt = the amount of each payment
r = the interest rate per period
n = the number of periods
For this problem, we have Pmt = $5,000, r = 10%, and n = 15.
Using the formula for an ordinary annuity (payments made at the end of each period), we get:
FV = $5,000 x ((1 + 0.10)^15 - 1) / 0.10
FV = $5,000 x (4.046 - 1) / 0.10
FV = $5,000 x 30.46
FV = $152,300
Therefore, the future value of the annuity is $152,300.
Now, to calculate the future value of an annuity due (payments made at the beginning of each period), we can use a slightly different formula:
FV = Pmt x ((1 + r)^n - 1) / r x (1 + r)
Where the additional (1 + r) term accounts for the fact that the first payment is made at the beginning of the period.
Using this formula, we get:
FV = $5,000 x ((1 + 0.10)^15 - 1) / 0.10 x (1 + 0.10)
FV = $5,000 x (4.046 - 1) / 0.10 x 1.10
FV = $5,000 x 30.46 x 1.10
FV = $167,260
Therefore, the future value of the annuity due is $167,260.
Comparing the two values, we can see that the annuity due results in a higher future value due to the additional compounding effect from the first payment being made at the beginning of the period.
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Strategic management focuses on integrating management, ________, and information systems to achieve organizational success.
A) marketing
B) finance/accounting
C) production/operations
D) research and development
E) all of the above
Strategic management focuses on integrating management, information systems, and other key functions to achieve organizational success. In this context, the correct answer is E) all of the above.
Strategic management is a comprehensive approach that considers various aspects of an organization, such as marketing, finance/accounting, production/operations, and research and development. By incorporating these different areas, strategic management ensures that a business can effectively develop and implement its vision and goals.
Integrating management refers to the process of combining and coordinating various management functions to achieve a unified and coherent approach to managing the organization. This ensures that all departments work together towards common objectives.
Information systems play a crucial role in strategic management by providing the necessary data and tools for decision-making and analysis. They help organizations gather, analyze, and manage data to make informed decisions and achieve their objectives.
To summarize, strategic management focuses on integrating management, marketing, finance/accounting, production/operations, research and development, and information systems to achieve organizational success.
This comprehensive approach helps organizations make better decisions, maximize their resources, and ensure that all departments work together towards a common goal.
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Imagine that your city decides to enact a rent-control law that limits the price of a one-bedroom apartment to $ 600 per month. Using the table below, answer the following questions.
Monthly rent Quantity demanded Quantity supplied
$500 800 140
$550 650 210
$600 500 280
$650 350 350
$700 200 420
Part 1
What is the market price without rent control? $
Part 2
How many one-bedroom apartments will be rented after the rent control law is passed?
A rent control law is a price cap rule that lowers the cost of renting an apartment but deters property owners from renting out their apartments.
Does rent regulation represent a pricing floor or ceiling solution?Rent control is a prime example of a price cap. Price ceiling refers to the maximum amount that, under the law, a seller may charge for a good or service. A landlord's ability to charge rent is restricted by rent control.
Does rent regulation represent a price floor? Is it real or not?A price ceiling, not a price floor, is what rent control is an example of. This is so because rent control limits the highest price a landlord may charge a tenant. A price floor is the lowest permitted price.
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Answer:part 1 is 650$ part 2 is 280
Explanation:
Mannix Corporation stock currently sells for $110 per share. The market requires a return of 9 percent on the firm's stock. If the company maintains a constant 4 percent growth rate in dividends, what was the most recent dividend per share paid on the stock?
The most recent dividend per share paid on the stock was $3.36.
We can use the constant growth model to solve for the most recent dividend per share paid on the stock. The formula for the constant growth model is:
D1 = D0 × (1 + g)
Where:
D1 = the dividend to be paid next year
D0 = the most recent dividend paid
g = the constant growth rate of dividends
We know that the market requires a return of 9 percent on the firm's stock, which means that the cost of equity (Ke) is 9%. We also know that the company maintains a constant 4 percent growth rate in dividends (g = 0.04).
Therefore, we can use the following formula to solve for D0:
D0 = D1 ÷ (1 + Ke - g)
Since we don't have the value of D1, we need to solve for it using the formula:
P0 = D1 ÷ (Ke - g)
Where:
P0 = the current stock price
We know that the current stock price is $110, Ke = 9%, and g = 4%. Plugging these values into the formula, we get:
$110 = D1 ÷ (0.09 - 0.04)
Solving for D1, we get:
D1 = $110 × (0.09 - 0.04) = $5.50
Now that we have D1, we can use the formula for D0 to solve for the most recent dividend per share paid on the stock:
D0 = $5.50 ÷ (1 + 0.09 - 0.04) = $3.36
Therefore, the most recent dividend per share was $3.36.
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QUESTION 16 Bertrand's price competition (implicitly or explicitly) assumes that: O a. Firms have some degree of market power and are not "small". b. There is intense price competition, in the sense that consumers can switch from one supplier to another at no, or a very low, switching cost. OC. Collusion is not possible. Od. All of the above. QUESTION 17 0 In the price leadership model covered in class: a. The follower(s) set the price and the leader supplies the amount of output that maximises its profit at this given price level. b. The leader sets the price taking into account that the demand that will be satisfied by the follower(s) at this price. OC. The leader maximises its profit subject to the follower's or followers' reaction function(s). d. The solution contradicts the Law of Demand.
Bertrand's price competition assumes that firms have some degree of market power, intense price competition exists where consumers can easily switch between suppliers, and collusion is not possible.
For question 16, the correct answer is d. All of the above. Bertrand's price competition assumes that firms have some degree of market power, intense price competition exists where consumers can easily switch between suppliers, and collusion is not possible. These assumptions are necessary for the Bertrand model to work effectively.
Moving on to question 17, the correct answer is c. The leader maximizes its profit subject to the follower's or followers' reaction function(s). This means that the leader considers how the follower(s) will react to its pricing decisions and adjusts its output accordingly to maximize profits. The follower(s) do not set the price in the price leadership model.
This model does not contradict the Law of Demand, which states that as the price of a good or service increases, the quantity demanded decreases, and vice versa. The price leadership model still follows this law, as the leader and follower(s) must consider market demand and elasticity when setting prices and determining output levels.
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which of the following is an advantage of the first in, first out (fifo) method? a. it results in lower tax liability. b. it reduces the risk of spoilage. c. record keeping is simple under this method. d. this method involves no complex calculations.
The advantage of the first in, first out FIFO method is that it reduces the risk of spoilage. Option B is correct.
The FIFO method assumes that the first items that are purchased or produced are the first items sold or used, which means that the oldest inventory is always used first. This is particularly useful for products that have a limited shelf life, such as perishable goods, where using the oldest inventory first helps to reduce the risk of spoilage and waste.
The other options listed do not accurately describe the advantages of the FIFO method. The FIFO method does not necessarily result in lower tax liability, as the tax liability depends on various factors such as the cost of goods sold and the tax laws in the jurisdiction.
The record keeping under the FIFO method may be simple, but it is not necessarily an advantage as other inventory methods may also have simple record keeping. Finally, the FIFO method may involve complex calculations when dealing with large inventories or multiple batches of similar products.
Hence, B. is the correct option.
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Omega Corporation has 10.4 million shares outstanding, now trading at $59 per share. The firm has estimated the expected rate of return to shareholders at about 11%. It has also issued long-term bonds at an interest rate of 6% and has a debt value of $220 million. It pays tax at a marginal rate of 21%. a. What is Omega's after-tax WACC? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) After-tax WACC % b. What would WACC be if Omega used no debt at all? (Hint: For this problem, you can assume that the firm's overall beta [BA] is not affected by its capital structure or by the taxes saved because debt interest is tax-deductible.) (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) WACC %
Answer:
The after-tax WACC 15.55%. WACC with no debt is 16.14%.
Explanation:
a. To calculate the after-tax WACC, we need to first find the cost of equity and the after-tax cost of debt.
Cost of equity:
Using the Capital Asset Pricing Model (CAPM), we have:
R_e = R_f + β(R_m - R_f)
where:
R_f = risk-free rate = 0 (not given in the problem)
β = beta = not given in the problem, so we need to use the information given to estimate it.
R_m = expected market return = 11% (given in the problem)
To estimate the beta, we can use the following formula:
β = (r_a - r_f) / (r_m - r_f)
where:
r_a = expected rate of return on Omega's stock = 11% (given in the problem)
r_f = risk-free rate = 0 (not given in the problem)
r_m = expected market return = 11% (given in the problem)
Therefore, β = 1.
Now, we can calculate the cost of equity using CAPM:
R_e = 0.11 + 1(0.11 - 0) = 0.22 or 22%
After-tax cost of debt:
The before-tax cost of debt is given as 6%, but we need to calculate the after-tax cost of debt. The formula for after-tax cost of debt is:
R_d = R_b(1 - T)
where:
R_b = before-tax cost of debt = 6% (given in the problem)
T = marginal tax rate = 21% (given in the problem)
Therefore, the after-tax cost of debt is:
R_d = 6%(1 - 0.21) = 4.74%
Weighted Average Cost of Capital (WACC):
The formula for WACC is:
WACC = (E/V)R_e + (D/V)R_d(1 - T)
where:
E = market value of equity = 10.4 million shares x $59 per share = $613.6 million
D = market value of debt = $220 million
V = total value of the firm = E + D = $833.6 million
Therefore, the WACC is:
WACC = (613.6/833.6)0.22 + (220/833.6)0.0474(1 - 0.21) = 0.1555 or 15.55%
b. To calculate WACC with no debt, we need to use the formula:
WACC = (E/V)R_e
where:
E = market value of equity = 10.4 million shares x $59 per share = $613.6 million
V = total value of the firm = E + D = $833.6 million
Therefore, the WACC with no debt is:
WACC = (613.6/833.6)0.22 = 0.1614 or 16.14%
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Corp. A just paid a dividend of $0.50 per share. It is expected to increase its dividend by 2% per year. If the market requires a return of 15% on assets of this risk, how much should the stock be selling for?
The stock should be selling for $3.85 per share.
To calculate the stock's current price, we need to use the dividend discount model, which is based on the present value of future dividend payments. The formula for the present value of a growing perpetuity is:
PV = D / (r - g)
Where PV is the present value of the perpetuity, D is the current dividend per share, r is the required rate of return, and g is the expected growth rate of the dividend.
In this case, the current dividend is $0.50 per share, and the expected growth rate is 2%. The required rate of return is 15%. Using these values, we can calculate the stock's price as:
PV = $0.50 / (0.15 - 0.02) = $3.85
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assume that the physical property of a business is valued at $50,000. the company's commercial property policy contains a coinsurance clause with a stated percentage of 80 percent. the company insures the property for $30,000 (75 percent of the specified minimum). the company incurs a fire loss of $20,000. how much of the loss will the insurance company pay for?
The insurance company will pay for $15,000 of the $20,000 loss, and the company will be responsible for the remaining $5,000.
According to the coinsurance clause, the minimum amount of insurance required is 80% of the property value, which is $40,000 (80% of $50,000).
The company only insured the property for $30,000, which is 75% of the minimum required amount. Therefore, the company is underinsured by $10,000 ($40,000 - $30,000).
To calculate the amount of the loss that the insurance company will pay for, we need to apply the coinsurance formula:
(Insurance carried / Insurance required) x Loss = Amount of loss covered
Substituting the given values:
($30,000 / $40,000) x $20,000 = $15,000
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when a business owner calculates the floor cost of a product, he or she excludes marketing costs from the calculations.group startstrue or false
True. When calculating the floor cost of a product, business owners exclude marketing costs from the calculations.
Floor cost refers to the minimum cost required to produce or purchase a product, and it includes the direct costs of production such as raw materials, labor, and overhead expenses.
Marketing costs, on the other hand, refer to the expenses incurred to promote the product and make it available to customers. These expenses include advertising, promotions, and distribution costs. Since marketing costs are not directly related to the production of the product, they are not included in the floor cost calculation.
However, marketing costs are still important for the business as they help to create awareness and demand for the product, which in turn increases sales and revenue. Therefore, it is essential for business owners to budget and plan for marketing expenses separately from floor costs.
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Your broker charges $0.0020 per share per trade. The exchange charges $0.0119 per share per trade for removing liquidity and credits $0.0101 per share per trade for adding liquidity. The current best BID price for stock XYZ is $72.81 per share, while the current best ASK price is $72.82 per share. You post an order to buy XYZ at the current best BID price and wait. Shortly after, the best BID and ASK prices move lower (down) by one cent each. Your buy order is executed. Immediately, you post an order to sell XYZ at the new best ASK price and wait. Shortly after, the best BID and ASK prices move higher (up) by one cent each. Your sell order is executed. What will be your net profit per share to buy and sell XYZ after considering the commissions and any exchange fees or credits? $0.0150 $0.0154 $0.0158 $0.0162 $0.0166
The net profit per share to buy and sell XYZ after considering the commissions and any exchange fees or credits is $0.0140.None of the answer options is correct.
Let's first calculate the cost of buying and selling one share of XYZ.
Buying one share at the best BID price of $72.81 will cost:
Cost of one share = $72.81
Broker's commission = $0.0020 per share
Exchange fee for removing liquidity = $0.0119 per share
Total cost to buy = $72.81 + $0.0020 + $0.0119 = $72.8239
Selling one share at the new best ASK price of $72.81 will earn:
Revenue from selling one share = $72.83
Broker's commission = $0.0020 per share
Exchange fee for adding liquidity = $0.0101 per share
Total revenue from selling = $72.83 - $0.0020 + $0.0101 = $72.8379
Therefore, the profit per share after considering all costs and fees is:
Profit per share = Total revenue - Total cost = $72.8379 - $72.8239 = $0.0140
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a business structure that combines the tax benefits of a limited partnership but is similar to a corporation in that is publicly traded on a security exchange is known as a
The business structure that you are referring to is known as a Master Limited Partnership (MLP).
An MLP is a type of partnership that combines the tax benefits of a limited partnership with the liquidity and access to capital of a publicly traded corporation. This structure is commonly used in the energy, natural resources, and real estate industries, where companies require significant capital investments to finance their operations.
In an MLP, the general partner manages the partnership and is responsible for making all business decisions. The limited partners provide capital and have limited liability for the partnership's debts and obligations. The limited partners also receive a share of the partnership's income and tax benefits, which can include deductions for depreciation and depletion.
One of the key advantages of an MLP is that it can be publicly traded on a securities exchange, allowing investors to buy and sell units in the partnership.
This provides investors with liquidity and the ability to diversify their portfolios. Additionally, MLPs are not subject to federal income tax at the entity level, which can result in significant tax savings for the partnership and its investors.
Overall, the MLP structure is an attractive option for companies that require access to capital and want to take advantage of the tax benefits of a partnership while remaining publicly traded.
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what term indicates the frequency with which workers perform specific behaviors that are representative of the job dimensions critical to successful performance?
The term that indicates the frequency with which workers perform specific behaviours that are representative of the job dimensions critical to successful performance is called "job performance".
This refers to the actions, tasks, and responsibilities that employees carry out on a regular basis to accomplish their job goals and objectives. Job performance can be measured by evaluating the quality, quantity, and timeliness of the work performed by employees.
It is important to assess job performance because it provides insights into how well employees are meeting the expectations of their role and how effectively they are contributing to the success of the organization.
Accurate assessments of job performance can help organizations identify areas for improvement and develop strategies to enhance overall productivity and performance.
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Large-cap stocks had the nominal rates of return of 14.81 percent. The rate of inflation during the last year was 2.37 percent. What is the real rate of return for large-cap stocks?
Round the answer to two decimal places in percentage form.
The real rate of return for large-cap stocks can be calculated by subtracting the rate of inflation from the nominal rate of return. Therefore, the real rate of return for large-cap stocks can be calculated as:
Real rate of return = Nominal rate of return - Inflation rate
Real rate of return = 14.81% - 2.37%
Real rate of return = 12.44%
Hence, the real rate of return for large-cap stocks is 12.44% rounded to two decimal places in percentage form. This means that the large-cap stocks generated a return of 12.44% after adjusting for inflation during the last year.
It is important to consider the real rate of return as it reflects the actual return that an investor earns after accounting for the impact of inflation on their investment.
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Exchange rates are influenced by all of the following EXCEPT:
A. political risks
B. purchasing power of the foreign country
C. purchasing power of the home currency
D. excessive trade deficits
Exchange rates are influenced by all of the following EXCEPT; purchasing power of the home currency
Exchange rates are influenced by all of the following: EXCEPT the purchasing power of the home currency. Factors that influence exchange rates include:
A. Political risks: Political instability or changes in government policies can affect the confidence of investors and currency values.
B. Purchasing power of the foreign country: A country with higher purchasing power will generally have a stronger currency, as its goods and services are more attractive to international buyers.
D. Excessive trade deficits: A country with a large trade deficit will generally have a weaker currency, as it is importing more than it is exporting, leading to increased demand for foreign currency and decreased demand for its own currency.
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Net profit is computed in the?
A)Profit and loss account B) Balance sheet C) Trial balance D) Trading account
Net profit is computed in the Profit and Loss Account. The correct option is (A). The Profit and Loss Account is a financial statement that summarizes the revenues, costs, and expenses incurred by a company over a specific period, usually a fiscal year or a quarter.
The process of computing net profit in the Profit and Loss Account involves several steps. First, the gross profit is calculated by subtracting the cost of goods sold from the revenue generated. Next, the operating expenses, which include items like salaries, rent, and utilities, are deducted from the gross profit to determine the operating profit. Following this, any non-operating income or expenses, such as interest income or loss on the sale of assets, are factored in. Finally, taxes are deducted to arrive at the net profit or loss.
In contrast, B) Balance Sheet provides a snapshot of a company's financial position at a specific point in time, showing its assets, liabilities, and equity. C) Trial Balance is a summary of all the ledger account balances to ensure that the total debits equal the total credits, helping to identify any errors in the recording process. D) Trading Account is a segment of the Profit and Loss Account, which specifically calculates the gross profit or loss by considering the cost of goods sold and the revenue generated from sales.
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Fariey Inc. has perpetual preferred stock outstanding that sells for $46 a share and pays a dividend of $3.25 at the end of each year. What is the required rate of return? Round your answer to two decimal places. %
The perpetual preferred stock of Fariey, Inc. has a required rate of return of 7.07%. Given the stock's current market value and projected dividends, this is the minimal return that investors would demand in order to purchase it.
The required rate of return for Fariey, Inc.'s perpetual preferred stock can be calculated using the dividend discount model formula:
Required rate of return = Dividend / Stock price
In this case, the annual dividend is $3.25 and the stock price is $46 per share.
Required rate of return = $3.25 / $46 = 0.07065 or 7.07% (rounded to two decimal places)
Therefore, the required rate of return for Fariey, Inc.'s perpetual preferred stock is 7.07%. This is the minimum return that investors would require to invest in this stock, considering its current market price and expected dividends.
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The effectiveness of magazine advertising is reduced by itsA) inflexibility.B) inability to target specific markets.C) brief life span.D) higher total cost, relative to television advertising.
The correct option is option "A" The effectiveness of magazine advertising is reduced by its inflexibility,
which means that once the advertisement has been printed, it cannot be altered or changed.
This is unlike other forms of advertising, such as online advertising or television advertising, where changes can be made on-the-fly. This inflexibility can be a drawback for businesses, as they may want to change their advertising message or approach as market trends or consumer preferences change.
Another factor that can reduce the effectiveness of magazine advertising is its inability to target specific markets. While magazines may have a specific readership, the audience may not be as targeted as with other forms of advertising. For example, online advertising can target users based on their browsing habits, demographics, or location, allowing businesses to target their advertising to the right people at the right time.
In addition, the brief life span of magazine advertising can also reduce its effectiveness. Magazines have a shorter shelf life compared to other forms of advertising, such as billboards or online ads, which can stay up for weeks or even months. This means that the impact of magazine advertising may be limited to the time period that the magazine is in circulation, which could be a drawback for businesses looking for a longer-term advertising strategy.
Finally, magazine advertising may also have a higher total cost relative to television advertising, which could reduce its effectiveness for businesses looking to maximize their advertising budget. While magazine advertising may be effective for certain types of businesses and target markets, it may not be the most cost-effective option for others.
So, the correct answer is option A
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The correct answer is A) inflexibility. Magazine advertising is often limited in its ability to adapt to specific target markets due to the inflexibility of the medium.
While it may have a longer life span compared to other forms of advertising, it is still not as effective as it could be if it were more flexible in targeting specific markets. Additionally, while the total cost of magazine advertising may be lower than that of television advertising, its effectiveness is often reduced due to its lack of adaptability. The effectiveness of magazine advertising is reduced by its A) inflexibility, as it cannot be easily updated or changed once printed, and B) inability to target specific markets, as the magazine's audience might not precisely match the desired target group for the advertisement.
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