16) The Nantucket Nugget is unlevered and is valued at $640,000. Nantucket is currently deciding whether including debt in its capital structure would increase its value. The current of cost of equity is 12%. Under consideration is issuing $300,000 in new debt with an 8% interest rate and maintaining this dollar amount of debt in the long run. Nantucket would repurchase $300,000 of stock with the proceeds of the debt issue. There are currently 32,000 shares outstanding and its effective marginal tax bracket is 34%. What will Nantucket's new WACC be? (5 pts)

Answers

Answer 1

Answer:

10.34%

Explanation:

Calculation to determine what will Nantucket's new WACC be

New Firm Value= $640,000 + (.34) ($300,000)

New Firm Value= $742,000

Capital Structure = $300,000 + $442,000

($742,000-$300,000=$442,000)

rs = .12 + (300/442) * (.12 - .08) * (1 - .34)

rs= .12 + .0179

rs = .1379*100

rs = 13.79%

Now let calculate the New WACC

New WACC = (300/742) * (.08) * (1 - .34) + (442/742) * (.1379)

New WACC= .0213 + .0821

New WACC= .1034*100

New WACC= 10.34%

Therefore what will Nantucket's new WACC be is 10.34%


Related Questions

what is human resources management?​

Answers

Answer:

Human resource management is the strategic approach to the effective and efficient management of people in a company or organization such that they help their business gain a competitive advantage. It is designed to maximize employee performance in service.

A retail store has three departments, S, T, and U, and does general advertising that benefits all departments. Advertising expense totaled $48,000 for the year, and departmental sales were as follows. Allocate advertising expenses to Department T based on departmental sales. (Do not round the intermediate calculations.)
Department S $111,000
Department T 213,150
Department U 146,250
Total 470,400

Answers

Answer:

Allocated costs= $21,600

Explanation:

Giving the following information:

Department S $111,000

Department T 213,150

Department U 146,250

Total 470,400

Advertising expense totaled $48,000 for the year.

First, we need to calculate the sales proportion for Department T:

Sales proportion= 213,150 / 470,400= 0.45

Now, we can allocate costs to Department T:

Allocated costs= 48,000*0.45

Allocated costs= $21,600

Mr. Deli wants to start a small sandwich shop in his neighborhood. He has enormous amounts of cash that he inherited from his Uncle Walt, so there are no problems with financing the costs of the business. (1) What is the best type of business for Mr. Deli to form

Answers

Answer:

sole proprietorship

Explanation:

A sole proprietorship is a type of business that is owned by one person

Characteristics

1. it is owned by one person

2. the business has unlimited liability

3. the business has limited access to capital

4. the business usually lacks continuity. this type of business usually ceases to exist when the owner dies

5. the business is usually not separated from the owner

What do you think happens to the price of an object as it goes through a large number of intermediaries?

Answers

Because the manufacturer is also the entity selling the good or service, prices tend to be lower in a direct distribution channel. Indirect channels, on the other hand, generally see higher prices because of the number of intermediaries involved. The more there are, the higher the price.

. If the prices of goods and services were expressed in terms of $20 for a shirt, $100 for a purse, what function of money is being described here?

Answers

Answer: unit of account.

Explanation:

Money is anything that's generally accepted by the people and used for making purchases. There are different functions of money such as:

• Means of payment

• Store of value

• Unit of account

• Standard for defered payment

If the prices of goods and services were expressed in terms of $20 for a shirt, $100 for a purse, the function of money that is shown here is the unit of account.

Unit of account simply means the measurement of value. This is something through which goods can be valued.

1- On November 2, Z-Mart purchased $500 of merchandise inventory for cash

Answers

Answer:

Merchandise Inventory (Debit 500)

Cash (Credit 500)

Purchased goods for cash.

Hope this helps

The following information relates to the manufacturing operations of the Abbra Publishing Company for the year: Beginning Ending Raw materials inventory $ 550,000 $ 613,000 The raw materials used in manufacturing during the year totaled $1,033,000. Raw materials purchased during the year amount to

Answers

Answer:

$420,000

Explanation:

Given the following information, Beginning ending raw materials inventory $560,000 $613,000

The raw materials used in manufacturing during the year is totaled $1,033,000

We will use the formula below to calculate raw materials purchased during the year

Raw materials purchases

= Direct materials used in production - Ending inventory

= $1,033,000 - $613,000

= $420,000

Question 4 A company has a temporary difference due to depreciation. For fiscal year 2012, its Income Tax Expense is $15,000 and its Taxable Income is $100,000. The statutory tax rate is 35% What is the correct journal entry for recording 2012 Income Tax Expense and Income Tax Payable

Answers

Answer:

Total income tax expense during the year is $15,000.

Statutory tax = 35% rate ($10,000*35% = $3,500).

Remaining part $11,500 ($15,000 - $3,500) would be the deferred tax liability.

Date   Accounts titles & Explanation        Debit       Credit

           Income tax expense                      $15,000

                 Deferred tax liabilities                               $11,500

                 Income tax payable                                   $3,500

           (To record income tax obligations)

A salt mine you inherited will pay you $25,000 per year for 25 years, with the first payment being made today. If you think a fair return on the mine is 7.5%, how much should you ask for it if you decide to sell it

Answers

Answer: $299574.17

Explanation:

From the question, we are given the information that a salt mine inherited will pay $25,000 per year for 25 years, with the first payment being made today. If the fair return on the mine is 7.5%, the amount that should be asked for it's to be sold goes thus:

Periodic amount = $25000

Return on mine = 7.5%

Number of years = 25

Selling amount will then be:

= 25000 + [-PV(7.50%,24,25000,0)]

= 25000 + [-PV(0.075,24,25000,0]

= $299574.17

=

Analysts expect Placer Corp. to pay shareholders $2.25 per share annually for the next five years. After that, the dividend will be $3.50 annually forever. Given a discount rate of 12%, what is the value of the stock today

Answers

Answer:

$24.66

Explanation:

Calculation to determine the value of the stock today

First step is to calculate the PVP

PVP = $3.50 / .12

PVP= $29.17

Second step is to calculate the PV

PV = $29.17 / 1.125

PV= $16.55

Third step is to calculate the PVA

PVA = $2.25 {[1 - (1 / 1.125)] / .12}

PVA= $8.11

Now let calculate the value of the stock today

Using this formula

Price=PV+PVA

Let plug in the formula

Price = $16.55 + 8.11

Price= $24.66

Therefore the value of the stock today is $24.66

Riverbed Corp issued 2,300 6%, 5-year, $1,000 bonds dated January 1, 2022, at face value. Interest is paid each January 1. Prepare a tabular summary to: (a) Record the sale of these bonds on January 1, 2022. (b) Adjust accounts on December 31, 2022, to record interest expense. (c) Record interest paid on January 1, 2023.

Answers

Answer: See explanation

Explanation:

The journal entry to record the transactions goes thus:

a. Jan 1, 2022:

Debit Cash 2300 × 1000 = 2300000

Credit Bonds payable 2300000

(To record sale of bonds)

b. Dec. 31, 2022

Debit Interest expense 2300000× 6% = 138000

Credit Interest payable 138000

c. Jan 1, 2023

Debit Interest payable 138000

Credit Cash 138000

(To record interest paid)

The relationships between inventory and throughput, and inventory and operating expense are defined as follows: As everyone is slowed down, the gap between the first and last hiker expands. As the gap expands, inventory drops. Operational expense is decreasing every time we hurry up because we are expending additional energy just to catch up. Group of answer choices True False

Answers

Answer:

False

Explanation:

Operational expense will instead increase when we hurry up because of the additional energy spent to catch up.  The relationship between inventory and throughput is determined by time because throughput is the rate of change in inventory and is a product of Inventory divided by Time.  This agrees with the inventory formula that states that throughput multiplied by time is equal to inventory.

This information relates to Sheridan Company for the year 2022.
Retained earnings, January 1, 2022 $91,100
Advertising expense 2,450
Dividends 8,160
Rent expense 14,200
Service revenue 78,880
Utilities expense 3,260
Salaries and wages expense 40,800
Prepare an income statement for the year ending December 31, 2022.

Answers

Answer and Explanation:

The preparation of the income statement is presented below:

Service revenue $78,880

Less: expenses

Advertising expense $2,450

Rent expense $14,200

Utilities expense $3,260

Salaries and wages expense $40,800

Net income $18,170

hence, the net income is $18,170

The same is to be considered

CVS pharmacy collects data from bar-coded products. These data can be evaluated and combined to monitor which CVS products are in demand by customers. CVS uses this method to track pricing data to make sure that CVS pricing is competitive. This is an example of _______.

Answers

Answer:

InfoScan.

Explanation:

A UPC is an acronym for universal product code. UPC is typically used for the identification of a specific product and its manufacturer (vendor) through a unique code that is printed on the product.

Basically, a universal product code (UPC) comprises of two (2) main parts;

A machine-readable barcode that contains sets of vertical black lines.

A unique twelve (12) digit number placed beneath or adjacent to the machine-readable barcode.

The first six-digits of the UPC represents the manufacturer and is printed on all of its products while the next five-digits is the product's unique reference number (item number) and the last digit is typically known as a check digit, used for the verification of the authenticity of a UPC.

Generally, the universal product code are usually scanned with a barcode scanner and this makes it easier to identify a product, as well as its price.

In this scenario, CVS pharmacy collects data from bar-coded products, which can be evaluated and combined to monitor its products that are in demand by customers. Also, this method is used to track pricing data to make sure that its pricing remains competitive among rivals. Thus, thiis is an example of InfoScan used for systemically scanning price information on products.

An issue of common stock currently sells for $52 per share, has an expected annual dividend to be paid at the end of the year of $0.90 per share, and has an expected growth rate to infinity of 5% per year. The expected rate of return on this security is:______

Answers

Answer: 6.73%

Explanation:

The expected rate of return will be calculated by using the formula:

Po= D1 / ( Ke – g )

Where,

Po = Current Price of the stock = $52

D1 = Expected dividend = $0.90

Ke = Expected rate of Return

g = Expected growth rate = 5% = 0.05

We'll then slot in the values into the equation. Therefore,

52.00 = 0.90 / (Ke – 0.05 )

(Ke – 0.05 ) = 0.90 / 52.00

(Ke – 0.05 ) = 0.01731

Ke = 0.05 + 0.01731

Ke = 0.06731

Ke = 6.73%

Therefore, the expected rate of return on this security is 6.73%.

If no page number or paragraph number is available when directly quoting from an electronic source, then the heading or section name along with the number of the paragraph within that section should be included.

a. True
b. False

Answers

Answer:

a. True

Explanation:

Plagiarism can be defined as the act of representing or using an author's work, ideas, thoughts, language, or expressions without their consent, acknowledgement or authorization.

This ultimately implies that, plagiarism is an illegal act of presenting another author's intellectual work or copyrighted items by using their ideas, thoughts, language or expressions, word for word without authorization or permission from the original author.

The four (4) common types of plagiarism are;

1. Copy and paste: this typically involves copying another author's work word for word and pasting it as yours without proper citation or reference with quotation marks.

2. Improper citation : this involves an author failing to provide an in-text reference or citation of the original author appropriately.

3. Find and replace: this typically involves an author finding some words to change (replace) in the original literary work.

4. Fabrication: this occur when an author makes up unverified or false data to use in his or her literary work.

Attribution can be defined as a process which typically involves the citation (reference) of an original source of information such as a quote, paraphrase or summary, using the author's full name and job title or position as the case may be.

Furthermore, if there is no page number or paragraph number when directly quoting from an electronic source, then one is permitted to use the heading or section name along with the number of the paragraph within that section.

Crestfield leases office space. On January 3, the company incurs $12,000 to improve the leased office space. These improvements are expected to yield benefits for 10 years. Crestfield has 4 years remaining on its lease. What journal entry would be needed to record the expense for the first year related to the improvements

Answers

Answer:

Debit Amortization Expense $3,000; credit Accumulated Amortization $3,000.

Explanation:

Based on the information given the appropiate journal entry that would be needed to record the expense for the first year related to the improvements will be

Debit Amortization Expense $3000

Credit Accumulated Amortization-Leasehold Improvements $3000

(Amortization Expense = 12000/4 = $3000)

(To record the expense for the first year)

Gerritt wants to buy a car that costs $28,250. The interest rate on his loan is 5.45 percent compounded monthly and the loan is for 5 years. What are his monthly payments

Answers

Answer:

$538.96

Explanation:

The monthly payments or installation (PMT) can be simply determine using a financial calculator as :

PV = $28,250

I = 5.45 %

P/YR = 12

N = 5 x 12 = 60

FV = $ 0

PMT = ?? ($538.96)

Therefore,

The monthly payments or installation (PMT) is $538.96

thus,

Gerritt monthly payments are $538.96.

I’m tired of being broke! Help

Answers

Answer:

ok its A

Explanation:

GET A SUGAR DADDY BAE

Consider the market for socks. The current price of a pair of plain white socks is $6.00. Two consumers, Jeff and Samir, are willing to pay $7.00 and $8.50, respectively, for a pair of plain white socks. Two sock manufacturers are willing to sell plain white socks for as little as $4.50 and $5.50 per pair. What is the total producer and consumer surplus (i.e., social welfare) in this market

Answers

Answer:

consumer surplus = $3.5

producer surplus = $2

Explanation:

Consumer surplus is the difference between the willingness to pay of a consumer and the price of the good.

Consumer surplus = willingness to pay – price of the good

Jeff's consumer surplus = $7 - $6 = $1

Samir's  consumer surplus = $8.50 - $6 = $2.50

total consumer surplus = $1 + $2.50 = $3.50

Producer surplus is the difference between the price of a good and the least price the seller is willing to sell the product

Producer surplus = price – least price the seller is willing to accept

Manufacturer 1's producer surplus = $6 - $4.5 = $1.50

Manufacturer 2's producer surplus = $6 - $5.50 = $0.50

total producer surplus = $1.50 + 0.50 = $2

A company reported total equity of $157,000 at the beginning of the year. The company reported $222,000 in revenues and $171,000 in expenses for the year. Liabilities at the end of the year totaled $98,000. What are the total assets of the company at the end of the year

Answers

Answer:

$306,000

Explanation:

The computation of the total assets is shown below;

The accounting equation is

Assets = Liabilities + Equity

But before that the ending equity should be determined  

So,

Profit = Revenue - Expenses

= $222,000 - $171,000

= $51,000

Thus, equity at the end of the year is

= $157,000 + $51,000

= $208,000

Now  Assets at the end of the year are,

Assets is

= $208,000 + $98,000

= $306,000

Here are the comparattive income statements of Georgia Development Corporation.

December 31, 2017 December 31, 2016
Net sales $600,000 $500,000
Cost of goods sold 414,000 350,000
Gross profit 186,000 150,000
Operating expenses 150,000 120,000
Net income $36,000 $30,000

Required:
Prepare a horizontal analysis of the income statement data for Georgia Development Corporation using 2016 as a base.

Answers

Answer:

When using horizontal analysis, figures are compared across different years with the subsequent year differences with the base year figures being a percentage of the base year's figures.

                                   12/31/2017        12/31/2016       Difference     Percentage

Net sales                        $600,000        $500,000       $100,000          20.0%

Cost of goods sold        $414,000         $350,000       $64,000           18.3%

Gross profit                    $186,000          $150,000       $36,000            24.0%

Operating expenses     $150,000         $120,000        $30,000           25.0%

Net income                     $36,000            $30,000        $6,000             20.0%

Net sales percentage = 100,000 / 500,000 = 20%

Cost of goods sold = 64,000 / 350,000 = 18.3%

Gross profit = 36,000 / 150,000 = 24%

Operating expenses = 30,000 / 120,000 = 25%

Net income = 6,000 / 30,000 = 20%

During September, the capital expenditure budget indicates a $400000 purchase of equipment. The ending September cash balance from operations is budgeted to be $56000. The company wants to maintain a minimum cash balance of $25000. What is the minimum cash loan that must be planned to be borrowed from the bank during September?

Answers

Answer:

the minimum cash loan borrowed is $369,000

Explanation:

The computation of the minimum cash loan borrowed is given below:

= Purchase value of an equipment - cash balance budgeted for september month + minimum cash balance

= $400,000 - $56,000 + $25,000

= $369,000

hence, the minimum cash loan borrowed is $369,000

Which of the following is an example of transparency?
A. The project manager ensures that only the project sponsor and
other key executives know what the primary deadlines are.
O B. The project manager posts all the project information (schedule,
guidelines, etc.) to a location that is accessible by the entire team.
C. The project manager uses team meetings to encourage
employees to get to know one another.
O D. The project manager encourages the team members to think
"outside the box" and challenge the guidelines as much as
possible.
Cause

Answers

Answer:

B

Explanation:

The project manager is being transparent in this case by posting project information, scheduling, etc. so that it may be accessible to everyone on the team, not hiding anything or making anything exclusive and excluding specific people

The project manager posts all the project information to a location that is accessible to the entire team is an example of transparency. Thus, option B is correct.

What is transparency?

By providing project details, like food scheduling, online so that everyone on the team can view them, the project manager is acting transparently in this instance by not keeping something a secret or making it exclusive so as to exclude particular team members.

A project team's culture of honest interactions and visibility is characterized by clarity when it comes to project and resource management. From a managerial standpoint, it frequently involves being open and forthcoming with one another regarding the project as the team as a whole.

The manager of the project and team members can quickly discover and express concern about any problems that might impede the project's development thanks to the assignment's status transparency.

Therefore, option B is the correct option.

Learn more about transparency, here:

https://brainly.com/question/14700591

#SPJ5

As a group, oligopolists would always be better off if they would act collectively... Group of answer choices as if they were each seeking to maximize their own individual profits. in a manner that would prohibit collusive agreements. as a single monopolist. as a single perfectly competitive firm.

Answers

Answer:

as a single monopolist

Explanation:

The oligopolist is the market structure where there are less sellers and if any actions are taken by them so it impact the price materially and also have the impact on the competitor

So as per the given situation, it would act as a single monopolist as they would charge high price because there is no competition

Therefore the above represent the answer

Explain in your own words the following methods. The use of mathematical (formal) derivations will be rewarded with extra points.
1. Two Stage Least Squares.
2. Estimation with control variables.
3. Panel estimation with fixed effects.

Answers

Answer:

1. Two Stage Least Squares

Two stage least squares is a statistical technique of regression analysis. It is used to analyze structural equations. It is used to compute estimated values of the problematic predictors and then linear regression model of dependent variables is computed. This technique is also used in quasi experiments.

2. Estimation with control variables

A control variable is constant element which is kept unchanged throughout the process of experiment in order to get the estimation.

3. Panel estimation with fixed effects

In Panel estimation fixed effects are referred to the estimator of the coefficient in regression model. Panel estimation method with fixed effects helps estimation of equations.

Explanation:

1. Two Stage Least Squares

Two stage least squares is a statistical technique of regression analysis. It is used to analyze structural equations. It is used to compute estimated values of the problematic predictors and then linear regression model of dependent variables is computed. This technique is also used in quasi experiments.

2. Estimation with control variables

A control variable is constant element which is kept unchanged throughout the process of experiment in order to get the estimation.

3. Panel estimation with fixed effects

In Panel estimation fixed effects are referred to the estimator of the coefficient in regression model. Panel estimation method with fixed effects helps estimation of equations.

affar Tabrizi is the owner of Tabrizi Oriental Rugs located in Toronto, Canada. He shops the world over, handpicks, and orders beautiful, authentic handmade rugs. He has them shipped to Canada, where he sells them through his brick-and-mortar stores and his www.tabrizi website. In terms of the marketing channel, Jaffar is acting as Multiple Choice a consumer. an agent. a wholesaler. a brokerage firm. a middleman.

Answers

Answer:

A middleman

Explanation:

A middle man in trade is a person that is willing to make negotiations between people that are not willing to meet themselves. They go the extra mile to purchase goods and make them available to customers that have need of them.

In the given scenario Tabrizi shops the world over, handpicks, and orders beautiful, authentic handmade rugs. He has them shipped to Canada, where he sells them through his brick-and-mortar stores and his www.tabrizi website.

Clients in Canada are not able to travel to far places to purchase rugs so he steps in to this role and obtains rugs for his local clients.

A ________ is an example of a first-line manager.

Answers

Answer:

shift manager, I believe

Explanation:

office manager is an example of a first line manager

The December 31, 2016 balance sheet of Jensen Company showed Equipment of $76,000 and Accumulated Depreciation of $18,000. On January 1, 2017, the company decided that the equipment hasa remaining useful life of 6 years with a $4,000 salvage value. Compute the depreciable cost of the equipment. Depreciable cost Compute the revised annual depreciation.
Revised annual depreciations

Answers

Answer:

A. $54,000

B. $9,000

Explanation:

A. Computation for the depreciable cost of the equipment

Book value, 1/1/17 $58,000

($76,000 – $18,000)

Less salvage value $4,000

Depreciable cost $54,000

($58,000-$4,000)

Therefore the depreciable cost of the equipment is $54,000

B. Computation for the revised annual depreciation

Revised annual depreciation = $54,000÷6 years

Revised annual depreciation = $9,000

Therefore the revised annual depreciation is $9,000

A consumer must spend all of her income on two goods (X and Y). In each of the following scenarios, indicate whether the equilibrium consumption of goods X and Y will increase or decrease. Assume good X is a normal good and good Y is an inferior good.

a. Income doubles.
b. Income quadruples and all prices double.
c. Income and all prices quadruple.
d. Income is halved and all prices double.

Answers

Answer:

a. Income doubles

consumption of good X will increase (normal good) will consumption of good Y will decrease (inferior good)

b. Income quadruples and all prices double.

consumption of good X will increase (normal good) will consumption of good Y will decrease (inferior good)

c. Income and all prices quadruple.

consumption of both goods will remain at the same level

d. Income is halved and all prices double.

consumption of good X will decrease (normal good) will consumption of good Y will increase (inferior good)

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