Pearson Motors has a target capital structure of 45% debt and 55% common equity, with no preferred stock. The yield to maturity on the company's outstanding bonds is 12%, and its tax rate is 25%. Pearson's CFO estimates that the company's WACC is 12.20%. What is Pearson's cost of common equity

Answers

Answer 1

Answer:

14.82 %

Explanation:

WACC = Cost of equity x Weight of equity + Cost of Debt x Weight of Debt

where,

After tax cost of debt = Interest x (1 - tax rate)

                                    = 12 % x (1 - 0.25)

                                    = 9 %

therefore,

Let the Cost of equity be Ce

12.20% = Ce x 0.55 + 9 % x 0.45

12.20% = 0.55 Ce + 4.05

Ce = 14.82 %

thus

Pearson's cost of common equity is 14.82 %


Related Questions

Project ____ includes identifying project tasks and estimating completion time and costs. Group of answer choices Planning. Scheduling. Monitoring and controlling. Reporting.

Answers

Answer:

Project _Planning___ includes identifying project tasks and estimating completion time and costs.

Explanation:

Project Planning is one of the five stages of project management, which starts with project initiation, planning, execution, performance monitoring, and project close.  Project scheduling is an activity carried out within project planning.  After a project is executed, its performance needs to be monitored, controlled, and finally reported to the project owners to bring it to a successful close.

Deazia is the sole proprietor of Baldwin Hair Salon that reported net income of $44,000 for the year. During the year she withdrew $20,000 from the business for personal use. How much income from the above must Deazia include in her gross income for the year

Answers

Answer:

$44,000

Explanation:

Based on the given information we were told that the sole proprietor reported NET INCOME of the amount of $44,000 for the year which means that the amount of income from the above that Deazia must include in her GROSS INCOME for the year will be the reported NET INCOME amount of $44,000.

a project has a beta of 1/07, the risk free rate is 2.1% and the market risk premium is 8.4% the projected expected rate o return is

Answers

Answer:

11.09%

Explanation:

Correct word is "a project has a beta of 1.07, the risk free rate is 2.1% and the market risk premium is 8.4%.The project expected rate of return is?"

As per CAPM, Expected rate of return = Risk free rate + (Beta*Market risk premium)

Expected rate of return = 2.1% + (1.07*8.4%)

Expected rate of return = 2.1% + 8.99%

Expected rate of return = 11.09%

So, the project expected rate of return is 11.09%.

Barbara's Baskets Company expects to manufacture and sell 30,000 baskets in 2019 for $5 each. There are 4,000 baskets in beginning finished goods inventory with target ending inventory of 9,000 baskets. The company keeps no work-in-process inventory. What amount of sales revenue will be reported on the 2019 budgeted income statement

Answers

Answer:

Sales revenue= $150,000

Explanation:

Giving the following information:

Barbara's Baskets Company expects to manufacture and sell 30,000 baskets in 2019 for $5 each.

The sales revenue is calculated as follow:

Sales revenue= number of units sold*selling price per unit

Sales revenue= 30,000*5

Sales revenue= $150,000

On December 31, 2020, Dow Steel Corporation had 610,000 shares of common stock and 31,000 shares of 9%, noncumulative, nonconvertible preferred stock issued and outstanding. Dow issued a 4% common stock dividend on May 15 and paid cash dividends of $410,000 and $70,000 to common and preferred shareholders, respectively, on December 15, 2021. On February 28, 2021, Dow sold 63,000 common shares. In keeping with its long-term share repurchase plan, 2,000 shares were retired on July 1. Dow's net income for the year ended December 31, 2021, was $2,150,000. The income tax rate is 25%.
Required:
Compute Dow's earnings per share for the year ended December 31, 2021.

Answers

Answer:

$3.02 per share

Explanation:

The computation of the earning per share is shown below:

we know that

Earnings per share = (Net income - preferred dividend) ÷  Weighted average outstanding common shares

= ($2,150,000 - $70,000) ÷ 688,000 shares

= $3.02 per share

Date                 Particulars           No. of shares

01/01-31/12 610000 ×  12 ÷ 12 (610000 × 1.04)  $634,400

28/02-31/12    63000 × 10 ÷ 12 (52500 × 1.04)   $54,600

01/07-31/12     (2000) ×  6 ÷ 12          -$1,000

Weighted average outstanding common shares 688,000

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%.

Synthetic clothing releases fibers during the washing process, which then end up poisoning rivers, lakes, and oceans. Fish and other wildlife consume the microfibers, accumulating toxins in their bodies that can become concentrated as they travel up the food chain. The production of synthetic clothing is an example of market failure due to:___________
a) the nature of public goods.
b) asymmetric information
c) external costs
d) misinformation

Answers

Answer:

c) external costs

Explanation:

The production of synthetic clothing represent the example of the external cost as the external costs is the cost that are spend by an individual or firm in which the outcome of an economic transaction that are indirectly included. In this the cost could occurs from both the production and the consumption

So as per the given situation, the option c is correct

In the month of June, a department had 19900 units in beginning work in process that were 75% complete. During June, 90200 units were transferred into production from another department. At the end of June there were 11000 units in ending work in process that were 40% complete. Materials are added at the beginning of the process, while conversion costs are incurred uniformly throughout the process. The equivalent units of production for conversion costs for June were

Answers

Answer:

103,500 units

Explanation:

Equivalent units calculation - conversion costs

Completed and transferred units (99,100 x 100 %)   = 99,100 units

Ending Work in Process units (11000 x 40%)             =  4,400 units

Total Equivalent units                                                  = 103,500 units

therefore,

The equivalent units of production for conversion costs for June were 103,500 units

Income can be earned through:
- A permanent job
- A seasonal job
- All of the above​

Answers

all of the above

mark me brainliesttt :))

If the U.S. engages in free trade and the international price of skateboards is $75, it would import _____ skateboards from the rest of the world.

Answers

ifthe U.S. engages in free trade and the international price of skateboards is $75, it would import _____ skateboards from the rest of the world.

Explanation:

answer would be 210

Isaac Inc. began operations in January 2021. For some property sales, Isaac recognizes income in the period of sale for financial reporting purposes. However, for income tax purposes, Isaac recognizes income when it collects cash from the buyer's installment payments. In 2021, Isaac had $676 million in sales of this type. Scheduled collections for these sales are as follows:

2021 $83 million
2022 137 million
2023 129 million
2024 162 million
2025 165 million
$676 million

Assume that Isaac has a 25% income tax rate and that there were no other differences in income for financial statement and tax purposes.

Required:
What deferred tax liability would Isaac report in its year-end 2021 balance sheet?

Answers

Answer:

$148.3 million

Explanation:

Calculation to determine the deferred tax liability that Isaac would report in its year-end 2021 balance sheet

Using this formula

Deferred tax liability=Total future taxable income × Tax rate

Let plug in the formula

Deferred tax liability=(2022 137 million+2023 129 million+2024 162 million+2025 165 million)*25%

Deferred tax liability=$593 million*25%

Deferred tax liability=$148.3 million

Therefore the deferred tax liability that Isaac would report in its year-end 2021 balance sheet is $148.3 million

Vaughn Company has the following equivalent units for July: materials 15340 and conversion 17700. Production cost data are: Materials Conversion Work in process, July 1 $ 8700 $ 3100 Costs added in July 68000 50000 The unit production costs for July are: Materials Conversion Costs

Answers

Answer:

Vaughn Company

The unit production costs for July are:

                                     Materials  Conversion

Cost per equivalent unit   $5             $3

Explanation:

a) Data and Calculations:

                                        Materials     Conversion

Beginning WIP                 $ 8,700          $ 3,100

Costs added in July         68,000          50,000

Total production costs   $76,700        $53,100

Equivalent units for July   15,340           17,700

Cost per equivalent unit   $5                 $3

b) The materials and conversion costs per equivalent unit are the dividends resulting from the division of the total production costs for materials and conversion by their respective total equivalent units of production.

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.

Select the behavior that does NOT represent an example of a speaker effectively preparing for a lecture.

a. John types up a copy of his speech in case he has an unexpected moment of stage fright.
b. Eva memorizes her entire speech because she wants to avoid the rigidity of reading off of a piece of paper.
c. Matt has anxiety about giving his speech, so he works on his linguistics homework to distract himself.
d. Molly records herself giving her speech and plays it back to be sure that she is speaking clearly.

Answers

Answer:

c. Matt has anxiety about giving his speech, so he works on his linguistics homework to distract himself.

Explanation:

The behavior that represent the examples with respect to the speaker effectively preparing for the lecture are as follows:

a. The john types a copy of his speech where there is non expected moment comes

b. Eva remember her total speech as she want to neglect the rigidity

c, The molly records her speech and she plays it back so to be sure that she speaks clearly or not

So as per the given situation, the option c should be considered

Name four commercial services which are useful to the manufacturer​

Answers

Answer:

hu

Explanation:

giyughhyyfrfjjtvvhi

The Boston Consulting Group (BCG) has given specific names and descriptions to the four resulting quadrants in its growth-share matrix based on the amount of cash they generate for or require from the organization. Stars are SBUs that are classified as having

Answers

Answer:

Stars are companies that possibly have a huge growth potential. This potential comes from being in a market that is growing rapidly, but at the same time, the division or products has a significant market share. It is basically the best scenario since the market is growing, the company's market share is growing, and profits should also be growing.

During February, $75,150 was paid to creditors on account, and purchases on account were $96,190. Assuming the February 28 balance of Accounts Payable was $32,310, determine the account balance on February 1.

Answers

Answer:

$45,000

Explanation:

Given the above information, the account balance on February 1 is computed below;

Balance of account payable Feb 28 + Cash paid to creditors in February - Purchases on account

= $59,900 + $186,500 - $201,400

= $45,000

Therefore, the account balance on February 1 is $45,000

During a job interview, Dario was unable to answer the interviewer's final question because it was slightly technical and he did not know the answer. He is worried that this one answer may cost him the job even though the rest of the interview went well. To possibly salvage his situation, Dario should

Answers

Answer:

He should restate a positive point that he would like the interviewer to know.

Explanation:

In an interview it is very important to create an impression that one can recover from a negative situation and stay positive.

In the given scenario where Dario was unable to answer the interviewer's final question because it was slightly technical and he did not know the answer, the way to express positivity is to restate a positive point that he will like the interveiwer to know.

In the interviewer's mind the conversation will now end on a positive note.

If the currency in circulation is $500 billion, the required reserve ratio is 5 percent, checkable deposits are $700 billion, and excess reserves total $10 billion, then the money multiplier for the M1 is

Answers

Answer:

2.35

Explanation:

The computation of the money multiplier for the M1 is shown below:

As we know that

Money supply(M1) = Currency in circulation + Checkable deposits

M1 money supply is = $500 billion + $700 billion

= $1,200 billion  

Now the M1 money multiplier is  

We know that  

Money multiplier = Money supply ÷ Monetary base

where,

Monetary base = Currency in circulation + Bank excess reserves

 = $500 billion + $10 billion

= $510 billion  

We know that,

Money multiplier = Money supply ÷ Monetary base

= $1,200 ÷ $510

= 2.35

Suppose that you are conducting market research at a regional mall in your city. The survey you are administering contains some relatively personal questions that some consumers might be reluctant to answer. As a result, you decide to select passers-by whom you believe are most likely to agree to answer your questions. Such an approach helps to ensure that all surveys will be completed and that questions will be answered in an unbiased manner. Nonetheless, it may come with a cost. Of the following statements, which is not a potential problem associated with this approach?

a. It might unexpectedly impact the "representativeness" of the sample.
b. All the answer options are potential problems.
c. It is likely to decrease the response rate.
d. It violates the underlying principles inherent in "probability sampling" techniques.
e. It could negatively influence the validity of the research study.

Answers

Answer: b. All the answer options are potential problems.

Explanation:

In other to get a truly unbiased result from surveys, the sample chosen should be completely random. This method is not random as the people being chosen are selected which means that the basic underlying principle of probability sampling of randomness is violated.

The representativeness of the sample might also be affected if only a certain type of people look like they will answer which means that only they will be represented in the sample. These problems have a strong chance of influencing the research in a negative way as the research may be biased.

And of course the response rate will likely be lower as only a certain type of people are being looked for and they might not number much.

Three major segments of the transportation industry are motor carriers, such as YRC Worldwide (YRCW); railroads, such as Union Pacific (UNP); and transportation logistics services, such as C.H. Robinson Worldwide, Inc. (CHRW). Financial statement information for these three companies follows (in thousands): YRC Union Pacific C.H. Robinson Sales $4,697,500 $19,941,000 $13,144,413 Average total assets 1,824,700 55,159,000 3,436,058 a. Determine the asset turnover for all three companies. Round to one decimal place. YRC Worldwide fill in the blank 1 Union Pacific fill in the blank 2 C.H. Robinson Worldwide fill in the blank 3 b. The ratio of sales to assets measures the number of sales dollars earned for each dollar of assets. The greater the number of sales dollars earned for every dollar of assets, the efficient a firm is in using assets.

Answers

Answer and Explanation:

The computation is shown below:

a) Assets turnover

Particulars                YRC                UNP                   CH

Sales                       $4,697,500      $19,941,000      $13,144,413

Average total assets $1,824,700      $55,159,000    $3,436,058

Assets turnover             2.6                       0.4                     3.8

b. The ratio of sales to assets calculated the sales dollars i.e. earned for each assets. The more the no of sales dollars the more the firm would be considered efficient

In cost-volume-profit analysis, the unit contribution margin is: Group of answer choices Sales price per unit less unit total cost per unit. Sales price per unit less unit fixed cost per unit. Sales price per unit less total variable cost per unit. )Sales price per unit less cost of goods sold per unit. The same as the contribution margin ratio.

Answers

Answer:  Sales price per unit less total variable cost per unit.

Explanation:

Cost-volume-profit analysis works by dividing the expenses faced by a business in the production and/ or selling of goods into fixed and variable costs.

To calculate the contribution margin in such a scenario, the Total variable cost incurred per unit is deducted from the sales price per unit. From this figure, the fixed cost can then be subtracted to find the operating income per unit.

If one wants to find the breakeven volume, you can divide the Fixed assets by the Contribution margin.

Determine the internal rate of return for a project that costs $177,000 and would yield after-tax cash flows of $21,000 per year for the first 5 years, $29,000 per year for the next 5 years, and $42,000 per year for the following 5 years.

Answers

Answer:

12.60 %

Explanation:

Using the CF function of a financial calculator the  internal rate of return will be calculated as follows :

- $177,000 CF 0

$21,000 CF 1

5 shift Nj

$29,000 CF 2

5 shift Nj

$42,000 CF 3

5 shift Nj

Then

Shift IRR = 12.60 %

therefore,

the internal rate of return for a project is 12.60 %

One of the advantages of work group cohesiveness is: the absence of conflict with other work groups formalized group norms reduced employee turnover the absence of resistance to change groupthink

Answers

Answer:

reduced employee turnover

Explanation:

Group cohesiveness occurs at the time when the bonds between the social group members to one another or the overall group are linked with each other. It can be in social relations, emotions, task relations, etc forms

Its advantage is that it decreased the turnover of the employees .Here the objective to accomplish the goal as a group rather than an individual

Therefore the above represent the answer

whistle works manufacturers safety whistle keychains. They have the following information available to prepare their master budget whistle works sells eafch whistle for $12. It takes .25 direct labor hours to produce each whistle at a cost of $15 per hour. How much will direct labor cost be in December

Answers

Answer:

See below

Explanation:

The above information is incomplete. However, similar question will be used.

Hide or show questions Progress:10/40 items Roman Industries' plant operates five days per week with a daily payroll of $6,000. Employees are paid every Saturday for the workweek just completed (Monday through Friday). The last day of the month is Wednesday, March 31. What is the amount of Wages Expense recorded on the next payday, Saturday, April 3

Answers

Answer:

$12,000

Explanation:

Calculation to determine the amount of Wages Expense recorded on the next payday, Saturday, April 3

Wages Expense =$6,000*2days

Wages Expense = $12,000

Therefore the amount of Wages Expense recorded on the next payday, Saturday, April 3 will be $12,000

You are offered the following investments: You can invest $500 today and receive $600 in 5 years. The investment is low risk. You can invest the $500 in a bank account paying 4%. What is the implied interest rate for the first choice, and which investment should you choose

Answers

Answer:

500

Explanation:

Drag each tile to the correct box.
Match each type of social media to its description.
allows users to provide short
updates to followers
connects individuals with common
relationships or interests
creates a space for individuals to
share knowledge on a specific topic
social network
arrowRight
discussion forum
arrowRight
microblogging
arrowRight
Reset Next

Answers

Answer:

1. Microblogging.

2. Social network.

3. Discussion forum.

Explanation:

1. Microblogging: it is an online platform or web resource designed and developed to avail end users with the opportunity to provide short updates to followers. One of the most commonly used microblogging platform in the world is Twi-tter. Others include Tumblr, Pinterest, WordPress, blog etc.

2. Social network: it is a software application, online platform or web resource designed and developed to connect individuals with common relationships or share similar interests. Face-book is one of the most widely used social network in the world today. Other social network include You-Tube, Hangout, Insta-gram, etc.

3. Discussion forum: it is an online platform or software application designed and developed to create a space for various individuals, especially registered members to share knowledge on a specific topic ranging from sports, education, comedy, movies, jobs, politics, romance, crime, books, food, etc. Some examples of discussion forum are Reddit, nairaland, etc.

Answer:

social network - connects individuals

discussion forum - creates a space

microblogging - allows users

plato

The "Danger Zone" is between what temperature range?

Answers

Answer:

41-135

Explanation:

Hello, there mate! The answer to this question is 41 - 135. In between these temperatures, bacteria flourishes the most. The ServSafe food guide states that the Danger Zone is 41 - 135 degrees, so you should not cook or store poultry or other foods in these temperatures. When you cook, it should be above 140, and when you freeze, it should be below 41. I hope I helped.

Capital budgeting is the process of analyzing: Group of answer choices Cash outflows only. Investments with certain outcomes only. Short-term investments. Operating revenues. Long-term investments.

Answers

Answer:

Long-term investments.

Explanation:

Capital budgeting can be regarded as process that is been utilized by business in determining the type proposed fixed asset purchases that need to be declined or should be accepted. This process helps in creating quantitative view as regards the proposed fixed asset investment, so that rational basis to make make a judgment can be surfaced. It should be noted that Capital budgeting is the process of analyzing Long-term investments.

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