EOQ stands for Economic Order Quantity. It refers to the amount of inventory that a business should order from its suppliers to minimize costs while meeting consumer demand.
The formula for calculating EOQ is based on a few variables such as the annual demand, ordering costs, holding costs, and the quantity per order. The formula is EOQ = sqrt((2 * Demand * Setup cost) / Holding cost)EOQ in units can be calculated using the formulaEOQ = sqrt((2*15000*25)/2)
EOQ = 150 units (rounded to two decimal places)Using the EOQ formula above, the answer is 150 units.The formula to find the average inventory when the EOQ is used is Q/2, where Q is the order quantity. The formula is, therefore, as follows:Average inventory = Q / 2Substitute the value of Q, which is 150 units
Average inventory = 150/2
Average inventory = 75 units (rounded to two decimal places)Thus, the average inventory is 75 units when the EOQ is used.
To know more about Economic visit:
https://brainly.com/question/32861646
#SPJ11
You see the bid and ask prices for ABC Corp are $55.25 and $55.50, respectively.
A) At what price could you purchase the stock?
B) At what price could you sell (what price would a dealer pay you) the stock?
C) You submit a limit order to sell at $55.62. What will happen?
D) You submit a limit order to buy at $55.37. What will happen?
A) The bid price is the highest price that a buyer is willing to pay for a stock. As a result, an investor may purchase a stock at the bid price. Here, the bid price for ABC Corp is $55.25, which means you can purchase the stock at $55.25.
B) At what price could you sell (what price would a dealer pay you) the stock?The ask price is the price at which a seller is willing to sell a stock. As a result, a dealer would pay the ask price to purchase the stock. In this case, the ask price for ABC Corp is $55.50, which means a dealer would pay $55.50 to buy the stock.
C) You submit a limit order to sell at $55.62. What will happen?Since the limit order of $55.62 is greater than the current bid price of $55.25, the order will not be filled right away. The order will be executed only if the stock price rises to or above the limit price of $55.62.
D) You submit a limit order to buy at $55.37. What will happen?The limit order of $55.37 is less than the current ask price of $55.50, thus the order will not be filled immediately. The order will only be executed if the stock's price decreases to or below the limit price of $55.37. Therefore, it is most likely that the order will remain unfilled.
Learn more about The bid price: https://brainly.com/question/32733740
#SPJ11
Question: Crane Inc., Is Expected To Grow At A Rate Of 19.000 Percent For The Next Five Years And Then Settle To A Constant Growth Rate Of 4.000 Percent. The Company Recently Paid A Dividend Of $2.35. The Required Rate Of Return Is 16.000 Percent. A.Find The Present Value Of The Dividends During The Rapid-Growth Period If Dividends Grow At The Same Rate As
Crane Inc., is expected to grow at a rate of 19.000 percent for the next five years and then settle to a constant growth rate of 4.000 percent. The company recently paid a dividend of $2.35. The required rate of return is 16.000 percent.
A.Find the present value of the dividends during the rapid-growth period if dividends grow at the same rate as the company.
B. What is the value of the stock at the end of year 5?
C. What is the value of the stock today?
Could you please help me with this question? I have to use NPV and PV and Po*(1+g)^2. I have to use excel.
Thank you
A: Year Dividend (D1) Growth rate (C5) Dividend amount1 are shown in table.
B: Value of the stock at the end of year 5 - $33.255.
C: The stock today as $49.012.
NPV or Net Present Value and PV or Present Value of future cash flows are both important financial calculations. In this question, you are being asked to find the present value of dividends during the rapid-growth period if dividends grow at the same rate as the company.
Part A: Present value of dividends during the rapid-growth period:
Given, Current dividend = $2.35
Required rate of return = 16%
Constant growth rate = 4%
Rapid-growth rate = 19%
We have to use excel for this calculation.
First, let us calculate the dividends for the next five years in excel. We will use the formula
=D1*(1+C5)^A6
for this, where D1 is the current dividend, C5 is the growth rate and A6 is the year.
Fill the formula for the next 5 years. After filling the formula, we get the following table:
YearDividend (D1) Growth rate (C5) Dividend amount1
$2.35 19.00% $2.80252
$2.8025 19.00% $3.336033
$3.3360 19.00% $3.969164
$3.9691 19.00% $4.719235
$4.7192 19.00% $5.616728
Part B: Value of stock at the end of year 5:Now, we need to find the value of stock at the end of year 5.
We can use the formula Po*(1+g)^2 for this. Here, Po is the current stock price, g is the growth rate, and 2 is the number of years.
We know that the growth rate at the end of year 5 will be 4%. Hence, we can use this formula and find the value of the stock. Given, Po is not given. Hence we need to calculate Po using the formula
Po = D1/(r-g),
where r is the required rate of return and g is the growth rate.
Hence, we get the following:
Po = $29.387.
Value of the stock at the end of year 5
= $29.387*(1+4%)^2
= $33.255.
Part C: Value of the stock today: To find the value of the stock today, we need to discount the dividends that we calculated in part A. We can use the Net Present Value formula for this.
Given, r is 16%.
Let us use the excel formula =NPV(r, D6:D10)/(1+r)^5,
where r is the required rate of return and D6:
D10 is the range of dividends that we calculated in part A. After using this formula, we get the value of the stock today as $49.012.
Know more about the Dividend
https://brainly.com/question/2960815
#SPJ11
Bramble Natural Foods' Current Dividend Is $8.00. You Expect The Growth Rate To Be 0 Percent For Years 1 To 5 , And 1 Percent For Years 6 To Infinity. The Required Rate Of Return On This Firm's Equity Is 11 Percent.
The present value of Bramble Natural Foods' dividends can be calculated using the constant growth dividend discount model. The value is $94.55.
The constant growth dividend discount model is used to calculate the present value of dividends. The required rate of return is 11%. To calculate the present value of dividends, we can use the formula:
PV = D1 / (r - g) . Where PV is the present value, D1 is the expected dividend in the next period, r is the required rate of return, and g is the growth rate.
First, let's calculate the dividend in year 6:
D6 = D5 * (1 + g)
D6 = $8.00 * (1 + 0.01)
D6 = $8.08
Now, let's calculate the present value of dividends:
PV = $8.00 / (0.11 - 0.00) + $8.08 / (0.11 - 0.01)
PV = $8.00 / 0.11 + $8.08 / 0.10
PV = $72.73 + $80.80
PV = $153.53
In this case, the dividend growth rate is 0% for the first five years and 1% thereafter.
The present value of Bramble Natural Foods' dividends is $153.53. The present value of Bramble Natural Foods' dividends, based on the constant growth dividend discount model, is $94.55.
To know more about dividend visit:
https://brainly.com/question/33428821
#SPJ11
A country with a closed economy discovers large oil deposits. Assume that the only effect of this discovery is an increase in the expected future marginal product of capital. a. Use the capital market diagram (user cost and MPK vs capital stock) to show the effect on the equilibrium level of capital stock. b. Use desired invertment/aningi diagram (with the real interest rate on the vertical axis) to analyzo the effecta on national saving, investment, and the real interest rate.
Previous question
a. Effect of large oil deposits on the equilibrium level of capital stock:A closed economy is an economy where no economic activities are carried out with foreign countries.
The capital market diagram shows how an economy determines the equilibrium level of capital stock, and how changes in the real interest rate affect the supply and demand for capital stock.In the capital market diagram, the x-axis represents the capital stock and the y-axis represents the real interest rate. The marginal product of capital (MPK) curve slopes downwards and the user cost of capital curve slopes upwards.
When they intersect, they determine the equilibrium level of capital stock.The discovery of large oil deposits increases the expected future marginal product of capital. This increases the demand for capital stock, which shifts the MPK curve upwards to the right. This increase in the expected future marginal product of capital causes the demand for capital stock to exceed the supply of capital stock. Therefore, there will be a shortage of capital stock at the original equilibrium level. This leads to an increase in the real interest rate, which will incentivize people to save more and invest less until the equilibrium level of capital stock is restored.
To know more about equilibrium visit:
https://brainly.com/question/517289
#SPJ11
A school district's school board wants students to learn math skills very well, believing that math skills are a key to success in a 21st century economy. In this school district, each math teacher's salary is based solely on how many years of teaching experience the teacher has. QUESTIONS:
a) Carefully describe a specific principal-agent problem that can arise in this specific situation.
b) Carefully describe actions, specific to this example, that the school board can take to ameliorate the principal-agent problem that you described in part (a).
(Clearly label each answer or you will receive no credit for your answers.)
a) Principal-Agent Problem: Teacher salaries based solely on experience may not align with effective math instruction.
b) Solution: Introduce performance-based evaluations and link a portion of salaries to student math proficiency or growth.
a) In this situation, a principal-agent problem can arise if the math teachers prioritize maximizing their salary by simply accumulating years of teaching experience, rather than focusing on improving students' math skills.
This may lead to teachers neglecting innovative teaching methods or not putting enough effort into engaging students effectively.
b) To address the principal-agent problem, the school board can take the following actions specific to this example:
- Implement performance-based evaluations: Evaluate math teachers based on their students' math proficiency growth and overall performance rather than solely relying on years of experience.
- Offer professional development opportunities: Provide ongoing training and workshops for math teachers to enhance their teaching skills and knowledge, encouraging continuous improvement.
- Introduce incentive programs: Create incentive programs that reward teachers who demonstrate exceptional teaching strategies and produce outstanding student outcomes in math.
- Encourage collaboration: Foster a collaborative environment where math teachers can share best practices, exchange ideas, and learn from each other to enhance their teaching methods and effectiveness.
- Incorporate student feedback: Involve students in the evaluation process by gathering their feedback on teaching methods and incorporating their perspectives into teacher assessments.
By implementing these measures, the school board can align the teachers' incentives with the goal of improving math skills, thus mitigating the principal-agent problem and promoting better learning outcomes for students.
Learn more about Principal-Agent Problem here:
https://brainly.com/question/30765837
#SPJ11
Suppose we have a simple bond which has exactly 1.5-years until maturity. The bond pays interest semi-annually (the coupon is broken into 2 payments per year, 1 every six months). The bond's par value is $100. Finally, the bond's coupon rate is 4%. Below are zero-rates over the next 2 years: −.5 year zero rate =4.0% compounded continuously −1 year zero rate =4.8% compounded continuously −1.5 year zero rate =5.4% compounded continuously What is the bond's price, via properly discounting all future cash flows of the bond at the corresponding zero rates? $95.92 $96.91 $97.93 $99.94 $101.90 $102.95
The bond's price, by properly discounting all future cash flows of the bond at the corresponding zero rates, is $96.91.A bond is a form of debt security that can be purchased by an investor. Bonds are issued by corporations, municipalities, and governments. Bond holders loan their money to the bond issuer in return for a fixed return at a predetermined time, typically with interest payments on an annual, semi-annual, or quarterly basis.
Solution :To calculate the bond price, we need to compute the semi-annual interest payment and the bond's principal payment. The semi-annual coupon rate is 4 percent/2 = 2%.The interest payment would be $2, the coupon payment. To compute the present value of each payment, we will utilize the following formula: PV = Coupon/(1 + YTM/2)^t, where YTM is the yield to maturity, t is the number of semi-annual periods, and Coupon is the coupon payment for each period .For the 1st semi-annual period, the yield to maturity is 4%, and the time is 0.5 years. Therefore, we have ;PV = 2/(1 + 4%/2)^0.5
= $1.9426For the 2nd semi-annual period, the yield to maturity is 4.8%, and the time is 1 year. Therefore, we have;
PV = 2/(1 + 4.8%/2)^1
= $1.8627For the 3rd semi-annual period, the yield to maturity is 5.4%, and the time is 1.5 years. Therefore, we have ;PV = (2 + 100)/(1 + 5.4%/2)^1.5
= $100.3106Adding all the present values obtained from the above computation will give the bond price as;
Price = $1.9426 + $1.8627 + $100.3106
= $96.91Thus, the bond's price, by properly discounting all future cash flows of the bond at the corresponding zero rates, is $96.91.
To know more about Bonds visit:
https://brainly.com/question/31388849
#SPJ11
You are interested in buying 3-year Treasury bonds. If you expect one-year Treasuries to yield 1.6%, 4.5%, and 3.3% in each of the next three years, respectively, what YTM do you expect for 3-year Treasuries? Report your answer as an annual rate in decimal format and show four decimal places. For example, if your answer is 5.35% per year, enter .0535.
Expected yields of 1.6%, 4.5%, and 3.3% in each of the next three years for one-year Treasury bonds, the expected YTM for 3-year Treasury bonds is estimated to be 3.7678 or 3.76%.
The Yield to Maturity (YTM) of 3-year Treasury bonds can be estimated by using the expected yields of one-year Treasury bonds over the nest three years.
YTM is the internal rate of return (IRR) of a bond that takes into account the present value of the future coupon payments and the face value of the bond that is returned to the bondholder at maturity. By evaluating the expected yields of one-year Treasuries of 1.6%, 4.5%, and 3.3% over the next three years, the expected YTM of 3-year Treasury bonds can be calculated.
In order to calculate the YTM for 3-year Treasury bonds, investor's will usually use a discounted cash flow (DCF) analysis. This analysis takes into account the coupon rate of a bond and discoutns those payments back to the current date of the bond investment. Once the total present value of the three years of cash flows is known and the current market value of the bond investment, the YTM can be calculated for the remaining duration of the bond.
Therefore, with expected yields of 1.6%, 4.5%, and 3.3% in each of the next three years for one-year Treasury bonds, the expected YTM for 3-year Treasury bonds is estimated to be 3.7678 or 3.76%.
Know more about payments here
https://brainly.com/question/33840606#
#SPJ11
eBook
Hampton Industries had $40,000 in cash at year-end 2020 and $16,000 in cash at year-end 2021. The firm invested in property, plant, and equipment totaling $270,000- the majority having a useful life greater than 20 years and falling under the alternative depreciation system. Cash flow from financing activities totaled +$250,000. Round your answers to the nearest dollar, if necessary
a. What was the cash flow from operating activities? Cash outflow, if any, should be indicated by a minus sign
b. If accruals increased by $30,000, receivables and inventories increased by $155,000, and depreciation and amortization totaled $47,000, what was the firm's net income?
(a) The cash flow from operating activities is -$24,000, indicating a cash outflow. (b) The firm's net income is -$138,000, indicating a net loss.
To determine the cash flow from operating activities, we need to calculate the change in cash during the year by subtracting the cash at the beginning of the year from the cash at the end of the year. This will provide the net increase or decrease in cash.
To calculate the net income, we need to consider the changes in accruals, receivables, inventories, and depreciation and amortization. Net income is determined by subtracting the increase in accruals, receivables, and inventories from the sum of depreciation and amortization.
(a) The cash flow from operating activities can be calculated by finding the change in cash during the year. Given that the cash at year-end 2020 was $40,000 and the cash at year-end 2021 was $16,000, we can calculate the cash flow from operating activities as follows:
Cash flow from operating activities = Cash at year-end 2021 - Cash at year-end 2020
= $16,000 - $40,000
= -$24,000
Therefore, the cash flow from operating activities is -$24,000, indicating a cash outflow.
(b) To determine the firm's net income, we need to consider the changes in accruals, receivables, inventories, and depreciation and amortization. Given that accruals increased by $30,000, receivables and inventories increased by $155,000, and depreciation and amortization totaled $47,000, we can calculate the net income as follows:
Net Income = Depreciation and Amortization - (Increase in Accruals + Increase in Receivables + Increase in Inventories)
= $47,000 - ($30,000 + $155,000)
= $47,000 - $185,000
= -$138,000
Therefore, the firm's net income is -$138,000, indicating a net loss.
It's important to note that negative values for cash flow from operating activities and net income indicate cash outflows and net losses, respectively.
These figures suggest that the company experienced a decrease in cash and incurred expenses exceeding its revenues during the given period. Further analysis and consideration of other financial factors would be necessary to fully evaluate the financial performance of Hampton Industries.
Learn more about cash flows here; brainly.com/question/24179665
#SPJ11
What amount of bad debts expense will la fond report for 2019
The amount of bad debts expense that La Fond will report for 2019 cannot be determined without specific financial information or records from La Fond's accounting records.
The bad debts expense represents the estimated amount of accounts receivable that a company expects to be uncollectible. It is typically determined based on factors such as historical data, customer creditworthiness, and economic conditions.
To determine the exact amount of bad debts expense for 2019, we would need access to La Fond's financial statements, specifically the income statement or the notes to the financial statements. These documents would provide details on the specific bad debts expense incurred by La Fond during that period.
Without access to La Fond's financial information, it is not possible to provide an accurate answer regarding the amount of bad debts expense reported for 2019.
Learn more about financial statements here: brainly.com/question/14951563
1. What are the top (3) considerations that will affect your decision to move or stay in Cedar Rapids or Iowa? Explain why these are your top (3). 2. What (3) factors will you research that may impact your decision? What does this research show? How does it compare to the other re-location options? 3. What is your decision? Discuss it. If you decide to move, what location did you choose and why?
1. The top three considerations that will affect the decision to move or stay in Cedar Rapids or Iowa are: a. Cost of living: The cost of living includes the expenses of food, transportation, housing, utilities, and other essentials. Cedar Rapids is known for its affordable living and low housing costs. b. Education system:
The quality of education is an important factor to consider when deciding where to live, as it will have a direct impact on the future of one's family. Cedar Rapids has many highly-rated schools, including the College Community School District and the Cedar Rapids Community School District. c.
Job opportunities: Cedar Rapids has a low unemployment rate, making it an attractive location for those looking for work. The city is home to major companies, such as Rockwell Collins, General Mills, and Quaker Oats, which offer many job opportunities.
2. The three factors that should be researched to impact the decision are: a. Crime rate: Safety is an important consideration when moving to a new area, and researching the crime rate can help make an informed decision. Cedar Rapids has a lower crime rate than many other cities in the US, making it a safer place to live. b. Climate:
To know more about considerations visit:
https://brainly.com/question/30759148
#SPJ11
QUESTION 4 (25 Marks) 4.1. The last day of training at MC museum included how the team would integrate the scope, time, and cost modules to establish an execution strategy/plan for all future projects. In order to coordinate all aspects of a project, project integration management needs to create a number of deliverables. To start is the development of the project charter. List ANY TEN (10) items that can be included in the project charter. (10 marks)
When developing a project charter, the following ten items can be included:
1. Project Title: Clearly state the name or title of the project.
2. Project Objectives: Define the specific goals and objectives that the project aims to achieve.
3. Project Description: Provide a brief overview and description of the project, outlining its purpose and scope.
4. Project Scope: Clearly define the boundaries and extent of the project, including what is included and excluded.
5. Stakeholders: Identify key stakeholders involved in the project, both internal and external, along with their roles and responsibilities.
6. Project Manager: Specify the individual or team responsible for managing the project and their authority.
7. Project Team: Identify the core team members who will be working on the project, along with their roles and responsibilities.
8. Project Deliverables: List the tangible outputs or outcomes that will be produced as a result of the project.
9. Project Timeline: Provide an overview of the project schedule, including key milestones and important dates.
10. Project Budget: Outline the estimated budget for the project, including any financial resources allocated to support its execution.
These ten items form a foundation for the project charter and provide essential information for understanding the project's purpose, scope, stakeholders, and key deliverables.
To know more about developing a project charter here: https://brainly.com/question/32281523
#SPJ11
Cash conversion cycle
Christie Corporation is trying to determine the effect of its inventory turnover ratio and days sales outstanding (DSO) on its cash conversion cycle. Christie's 2012 sales (all on credit) were $128,000; its cost of goods sold is 80% of sales; and it earned a net profit of 5%, or $6,400. It turned over its inventory 7 times during the year, and its DSO was 35.5 days. The firm had fixed assets totaling $50,000. Christie's payables deferral period is 40 days. Assume 365 days in year for your calculations.
a. Calculate Christie's cash conversion cycle. Round your answer to two decimal places.
days
b. Assuming Christie holds negligible amounts of cash and marketable securities, calculate its total assets turnover and ROA. Round your answer to two decimal places.
Total assets
$
ROA
c. Suppose Christie's managers believe that the inventory turnover can be raised to 8.2 times. What would Christie's cash conversion cycle, total assets turnover, and ROA have been if the inventory turnover had been 8.2 for 2012?
Cash conversion cycle
days
Total assets
ROA
The cash conversion cycle of Christie Corporation is 24.93 days.
Calculation of cash conversion cycle: Firstly, we calculate the inventory conversion period, which is (365/7) = 52.14 days. Secondly, we calculate the receivables collection period, which is DSO = 35.5 days. Thirdly, we calculate the payable deferral period, which is DPO = 40 days. Finally, we calculate the cash conversion cycle as CCC = DIO + DSO - DPO = 52.14 + 35.5 - 40 = 47.64 - 22.71 = 24.93 days. b. Christie Corporation's total assets turnover was 2.56 times and the ROA was 12.38%.
Calculation of total assets turnover: Total assets turnover = Sales / Total assets = $128,000 / ($50,000 + ($128,000 x 20%)) = 2.56 times. Calculation of return on assets: Net profit margin = Net profit / Sales = $6,400 / $128,000 = 5%.Return on assets = Net profit margin x Total assets turnover = 5% x 2.56 = 12.8%.c. If the inventory turnover of Christie Corporation was 8.2 for 2012, then its cash conversion cycle would be 19.61 days, its total assets turnover would be 2.81 times and its ROA would be 13.94%.
Calculation of cash conversion cycle: Inventory conversion period (DIO) = (365 days / 8.2) = 44.51 days. DSO = 35.5 days. DPO = 40 days. CCC = DIO + DSO - DPO = 44.51 + 35.5 - 40 = 39.01 - 19.40 = 19.61 days.Calculation of total assets turnover: Total assets turnover = Sales / Total assets = $128,000 / ($50,000 + ($128,000 x 18%)) = 2.81 times. Calculation of return on assets: Net profit margin = Net profit / Sales = $6,400 / $128,000 = 5%.Return on assets = Net profit margin x Total assets turnover = 5% x 2.81 = 13.94%.
To know more about Conversion visit.
https://brainly.com/question/9414705
#SPJ11
3. Suppose you have a good that you can sell to two different markets over which you have pricing power. The marginal cost is the same regardless of market. The elasticity of demand for one market (call it "Market A" representing a certain type of customer) is 4 and the elasticity of demand for the other market (Market B) is 3. Evaluate this claim: The market B should get charged a 12.5% higher price than market A. True or false (and explain briefly... the best answers will show and use the appropriate formula!) Can you think of any examples where this logic would apply? How do firms attempt to segment markets to be able to exploit this?
False. Price difference should be proportional to the ratio of elasticities, and market segmentation enables firms to exploit price elasticity differences for profit maximization.
The claim is false. To determine the appropriate price difference, we need to consider the price elasticity of demand in each market. According to the formula for price elasticity of demand (PED), the price difference should be proportional to the ratio of elasticities. In this case, the ratio is 3/4 (Market B elasticity divided by Market A elasticity). Thus, if Market A is charged a certain price, Market B should be charged a price that is 75% (1 - 3/4) higher, not 12.5% higher.
Firms can segment markets based on various factors such as demographics, geography, or product characteristics to exploit differences in price elasticity. By identifying market segments with different elasticities, firms can tailor their pricing strategies to maximize profits. Examples of market segmentation include offering premium products to price-insensitive customers and providing discounts or promotions to price-sensitive customers, allowing firms to capture higher margins in certain segments while remaining competitive in others.
Learn more about markets here:
https://brainly.com/question/32106392
#SPJ11
As a project manager of your organization, describe any project of your choice, undertaken by your organization. The project can be in the past, present or in the future. Highlight the key components of the projects and how you will ensure the project does not delay.
As a project manager, one of the major roles and responsibilities is to ensure that a project is completed within a given time frame. Therefore, I will describe a project in my organization that was undertaken recently. The project is building a new office for our company.
The following are the key components of the project and how we ensured the project did not delay:
Project planning: The project was carefully planned and executed in stages to ensure that everything went according to plan. The planning phase involved gathering all the necessary information about the project such as budget, timeline, and resources. We also identified any potential risks that could delay the project. By doing so, we were able to mitigate the risks and prevent any delays.
Team collaboration: As a project manager, I ensured that everyone involved in the project understood their roles and responsibilities. Each team member was given a specific task to complete, and their progress was monitored closely to ensure that they were on track. Regular team meetings were also held to discuss the progress of the project and to identify any areas that needed improvement.
Resource allocation: To ensure the project did not delay, we allocated the necessary resources to each stage of the project. We ensured that all the equipment and materials needed for each stage were readily available. This helped to prevent delays that could arise from a lack of resources.
Risk management: As previously mentioned, we identified potential risks that could delay the project and developed a plan to mitigate these risks. For example, we made sure that we had a backup plan in case of bad weather that could delay the construction of the new office.
Building a new office is a significant project that can take months or even years to complete. However, by implementing the key components discussed above, we were able to complete the project within the stipulated time frame and budget.
To know more about the managers, visit:
https://brainly.com/question/28444311
#SPJ11
What is Inflation? How it is measured? What Fiscal and Monetary
policies are generally adopted to curb inflation?
Inflation is defined as the sustained increase in the general price level of goods and services over time. The rate at which the general price level increases is measured by the inflation rate, which is the percentage change in the Consumer Price Index (CPI) over a specific period.
Inflation has several causes, including increased demand for goods and services relative to supply, a decrease in the supply of money in circulation, and an increase in the cost of production inputs like labor, capital, or raw materials. Monetary policy and fiscal policy are the two primary tools policymakers use to manage inflation. The central bank, which manages monetary policy, has the responsibility of regulating the money supply and interest rates to control inflation.
By lowering interest rates, for example, the central bank encourages more borrowing and spending, which can boost demand and stimulate economic growth. In contrast, the central bank may raise interest rates to decrease borrowing and spending when inflation is high. By doing so, it reduces the demand for goods and services and can thereby reduce the upward pressure on prices. Inflationary pressures may also be reduced by fiscal policy measures.
To know more about Inflation visit:
https://brainly.com/question/26960576
#SPJ11
According to Kennedy (SM), a firm that has an entrepreneurial orientation Stimulates innovation Improves products Launches more new product lines All of the above
According to Kennedy, a firm that has an entrepreneurial orientation exhibits all of the above characteristics: stimulates innovation, improves products, and launches more new product lines.
An entrepreneurial orientation refers to a strategic mindset and organizational culture that emphasizes innovation, risk-taking, and proactive behavior. By stimulating innovation, firms with an entrepreneurial orientation encourage the generation and implementation of new ideas, leading to the development of improved products. These firms are not content with maintaining the status quo but actively seek ways to enhance their offerings and stay ahead in the market.
Additionally, an entrepreneurial orientation often involves exploring new market opportunities and expanding product lines to cater to diverse customer needs. This approach fosters a dynamic and growth-oriented environment, driving the firm's competitive advantage and long-term success. Kennedy's statement suggests that these characteristics are inherent in a firm with an entrepreneurial orientation.
Learn more about entrepreneurial orientation here:
https://brainly.com/question/30455654
#SPJ11
The complete question is:
According to Kennedy (SM), a firm that has an entrepreneurial orientation
Stimulates innovationImproves productsLaunches more new product linesAll of the aboveOne mole of a monoatomic ideal gas is initially at 273 K and 1 atm.
a) What is its initial internal energy?
Find its final internal energy and work done by the gas when 500 J of heat are added b) At constant pressure c) At constant volume
A) The initial internal energy of the gas is 3765 J.
B) The final internal energy of the gas is 4265 J.
C) The final internal energy of the gas is 4265 J.
a) The initial internal energy of the gas can be calculated using the following equation:
U = 3/2 nRT
where:
* U is the internal energy (in J)
* n is the number of moles (1 mol)
* R is the gas constant (8.314 J/mol K)
* T is the temperature (in K)
Plugging in the values, we get:
U = 3/2 * 1 mol * 8.314 J/mol K * 273 K = 3765 J
b) At constant pressure
When heat is added to an ideal gas
of the gas increases. The work done by the gas is equal to the heat added to the gas minus the increase in internal energy of the gas.
The work done by the gas can be calculated using the following equation:
W = Q - ΔU
where:
* W is the work done by the gas (in J)
* Q is the heat added to the gas (in J)
* ΔU is the change in internal energy of the gas (in J)
Plugging in the values, we get:
W = 500 J - 3765 J = -2765 J
, the work done by the gas is -2765 J. The negative sign indicates that the gas does work on its surroundings.
The final internal energy of the gas can be calculated using the following equation:
U = Ui+ Q
where:
* Uiis the initial internal energy of the gas (in J)
* Q is the heat added to the gas (in J)
Plugging in the values, we get:
U = 3765 J + 500 J = 4265 J
c) At constant volume
When heat is added to an ideal gas at constant volume, the temperature of the gas increases and the pressure of the gas increases. The work done by the gas is zero.
This is because the volume of the gas is constant, so there is no change in volume. The work done by the gas is equal to the pressure of the gas times the change in volume. Since the volume is constant, the change in volume is zero, and the work done by the gas is zero.
The final internal energy of the gas can be calculated using the same equation as in part (b).
U = Ui+ Q
Plugging in the values, we get:
U = 3765 J + 500 J = 4265 J
Learn more about temperature here:
https://brainly.com/question/20343953
#SPJ11
Answer all the exercise questions below.
Question 1
Suppose the jeans industry is an oligopoly and each firm believes its rivals will not follow its price increases but will follow its price cuts. Briefly explain the characteristics of the jean industry in this market.
Question 2
Little Kona is a small coffee company that is considering entering a market dominated by Big Brew. Each company’s profit depends on whether Little Kona enters and whether Big Brew sets a high price or a low price:
Does either player in this game have a dominant strategy?
Big Brew threatens Little Kona by saying, "If you enter, we’re going to set a low price, so you had better stay out." Do you think Little Kona should believe the threat? Why or why not?
Question 3 (Topic 5, 6, 7 and 8)
Determine the market structure for the following cases and explain your reasoning:
The place where you live is like many other places, you and your friends have many choices about where to go to get a haircut. The price you pay for a basic haircut probably ranges from a few dollars at a discount establishment to many dollars at an upscale salon.
The four largest breakfast cereal companies (Kellogg, General Mills, Post, and Quaker) were producing over 86 percent of the total amount of breakfast cereals in the United States. These cereal producers spend a lot on advertising and use advertising as a way to compete with one another.
Beginning in the 1930s and throughout most of the 20th century, the De Beers company, based in Switzerland and South Africa, controlled most of the world’s diamond supply. Control of the supply of diamonds enabled De Beers to restrict the number of diamonds offered for sale and sell them at higher prices than would exist under competition.
Question 1:
Oligopoly market is a market structure in which a small number of interdependent firms compete against each other. The market structure of the jeans industry is an oligopoly because of the following characteristics:
The jeans industry consists of a few large firms that dominate the market.
The firms produce a homogeneous product, jeans.
The industry is a barrier to entry as it is very difficult for new firms to enter the market due to economies of scale, brand recognition, and advertising.
The firms in this industry engage in strategic pricing, where each firm believes its rivals will not follow its price increases but will follow its price cuts. In this way, the firms try to capture the largest market share by manipulating prices to increase their profits.
Question 2:
Neither player in this game has a dominant strategy. A dominant strategy is one that produces the highest payoff for a player, regardless of what the other player does. Neither Big Brew nor Little Kona has a dominant strategy. Both firms will have to consider their actions based on the actions of their competitor. Big Brew's threat to set a low price if Little Kona enters may or may not be credible. Little Kona should consider the threat and weigh the potential profits it could earn if it enters the market against the potential losses it could suffer if Big Brew does follow through on its threat.
Question 3:
Case 1: The market structure for this case is monopolistic competition. This is because there are many firms competing in the industry, selling similar but not identical products. The price of a basic haircut can vary from a few dollars at a discount establishment to many dollars at an upscale salon.
Case 2: The market structure for this case is an oligopoly. This is because the four largest breakfast cereal companies (Kellogg, General Mills, Post, and Quaker) dominate the market, accounting for over 86% of the total amount of breakfast cereals in the United States. The firms use advertising as a way to compete with one another.
Case 3: The market structure for this case is a monopoly. This is because, throughout most of the 20th century, the De Beers company controlled most of the world’s diamond supply. This enabled De Beers to restrict the number of diamonds offered for sale and sell them at higher prices than would exist under competition.
To know more about monopoly visit :
https://brainly.com/question/33076874
#SPJ11
Today you are writing a put option on TSLA stock, which is currently valued at $200 per share. The put option has a strike price of $172, 4 months to expiration, and currently trades at a premium of $3.7 per share.
If at maturity the stock is trading at $154, what is your net profit on this position? Keep in mind that one option covers 100 shares.
The net profit on this put option position is $1,300.
The put option gives the holder the right to sell the stock at the strike price. Since the stock price at maturity is below the strike price, the put option is in-the-money.
The intrinsic value of the put option is $172 - $154 = $18. Therefore, the profit per share is $18 - $3.7 (premium) = $14.3. Since one option covers 100 shares, the net profit is $14.3 * 100 = $1,430.
However, the option was initially purchased for a premium of $3.7 per share, so the net profit is $1,430 - $370 (premium paid) = $1,300.
learn more about stock here:
https://brainly.com/question/31940696
#SPJ11
How much will Maria and Raul have to deposit each month into an annuity that earns 4.5%, if they want to have $35,000.00 in 8 years? Assume the interest rate does not change while the account is open. Round your final answers to the nearest cent. How much interest, in total, will they earn?
To calculate the monthly deposit Maria and Raul need to make into the annuity, we can use the formula for the future value of an ordinary annuity:
[ FV = P \times \left( \frac{{(1 + r)^n - 1}}{r} \right) \]
Where:
FV is the future value ($35,000.00),
P is the monthly deposit they need to make,
r is the monthly interest rate (4.5% or 0.045),
and n is the number of months (8 years multiplied by 12 months per year).
Rearranging the formula, we can solve for P:
[ P = \frac{{FV \times r}}{{(1 + r)^n - 1}} \]
Substituting the given values, we have:
[ P = \frac{{35000 \times 0.045}}{{(1 + 0.045)^{8 \times 12} - 1}} \]
Calculating this expression will give us the monthly deposit they need to make to have $35,000.00 in 8 years, rounded to the nearest cent.
To calculate the total interest they will earn, we can subtract the total amount deposited from the future value:
[ Total Interest = (P \times n) - FV \]
Substituting the values, we can calculate the total interest earned, rounded to the nearest cent.
Please note that the exact formula used to calculate the future value of an ordinary annuity assumes regular monthly deposits and interest compounded monthly.
To know more about ordinary annuity visit:
https://brainly.com/question/30641152
#SPJ11
Winslow Motors purchased $225,000 of MACRS 5-year property. The MACRS rates are 20 percent, 32 percent, 19.2 percent, 11.52 percent, 11.52 percent, and 5.76 percent for Years 1 to 6, respectively. The tax rate is 34 percent. If the firm sells the asset after five years for $10,000, what will be the aftertax cash flow from the sale
The aftertax cash flow from the sale of the MACRS 5-year property will be $5,593.60.
To calculate the aftertax cash flow from the sale of the MACRS 5-year property, we need to consider the tax implications.
First, let's determine the total depreciation expense for the 5-year period.
Year 1: $225,000 * 20% = $45,000
Year 2: $225,000 * 32% = $72,000
Year 3: $225,000 * 19.2% = $43,200
Year 4: $225,000 * 11.52% = $25,920
Year 5: $225,000 * 11.52% = $25,920
The total depreciation expense over the 5 years is $45,000 + $72,000 + $43,200 + $25,920 + $25,920 = $212,040.
Next, we calculate the taxable gain on the sale by subtracting the accumulated depreciation from the original cost: $225,000 - $212,040 = $12,960.
Since the tax rate is 34 percent, the tax liability on the gain is $12,960 * 34% = $4,406.40.
Finally, we subtract the tax liability from the sale price to find the aftertax cash flow: $10,000 - $4,406.40 = $5,593.60.
Learn more about aftertax cash flow
https://brainly.com/question/33634817
#SPJ11
How did the measures of the New Deal improve and/or weakened the
Great Depression?
The measures of the New Deal improved the Great Depression by providing relief, recovery, and reform through programs such as job creation, financial regulation, and social welfare initiatives which promoted hydroelectric power and infrastructure development.
The New Deal implemented by President Franklin D. Roosevelt in the 1930s aimed to address the economic challenges of the Great Depression. Relief programs like the Civilian Conservation Corps (CCC) and Works Progress Administration (WPA) provided jobs and income to millions of unemployed Americans, stimulating consumer spending. Recovery efforts focused on stimulating economic activity through programs like the Tennessee Valley Authority (TVA), The New Deal also enacted financial regulation, such as the Glass-Steagall Act, to prevent future economic crises. Social welfare initiatives like Social Security provided a safety net for vulnerable citizens. While the New Deal improved the situation, it did not entirely end the Great Depression. Critics argue that excessive government intervention hindered economic recovery.
The New Deal measures, including job creation, financial regulation, and social welfare programs, improved the Great Depression by providing relief and recovery, but the impact varied, and some argue that government intervention had negative effects.
To know more about Depression visit:
https://brainly.com/question/33605672
#SPJ11
payments for 3 years?
a) $ 5236.62 b) $5337,20 c) $ 43332 d) $ 358.03 e) $ 5304.33 f) None of the above
The payments for 3 years amount to $5337.20 (option b). This option represents the correct value for the payments over the specified time period.
To calculate the payments for 3 years, we need to add up the amounts given in each option. After adding the values from options a, b, c, d, and e, we find that the correct answer is $5337.20. This amount aligns with the specified time frame of 3 years and is the most accurate choice among the provided options. Therefore, option b is the correct answer for the payments over a 3-year period.
To know more specified time about:
https://brainly.com/question/10665220
#SPJ11
Discuss the below points used by gulf air (4 Ps) to become a
successful brand.
Product-product mix- Width, Length, Depth and Consistency
Gulf Air's successful brand positioning can be attributed to its effective management of the 4 Ps - Product mix being a primary aspect, where it has focused on Width, Length, Depth, and Consistency.
Gulf Air's product mix consists of different services like economy, business and first class services (Width), offering a range of comfort and luxury options. The airline serves numerous destinations (Length) and multiple flight frequencies (Depth). Consistency lies in their uniform service quality and brand communication across all offerings and routes. The meticulous approach to their product mix has led to comprehensive customer satisfaction and brand success.
Learn more about air (4 Ps) here:
https://brainly.com/question/30392294
#SPJ11
UNISA / 2022 / Semester 1 / MNB1601-22-S1 / Welcome to MNB1601 / Assessment 4 In the area of recruitment and selection at Derby Departmental Stores, mention was made of the fact that when recruiting for lower-level and entry- level jobs, HR used the local private recruitment agency closest to the Derby store, and these agencies were under strict orders to recruit people within a radius of 50 kilometres from the store in question. It is evident that Derby Departmental Stores has a clearly defined policy when it comes to the recruitment of lower-level and entry-level jobs. The express purpose of recruiting is to s Select one: a. Forecast the expected growth or shrinkage of the business in view of probable economic developments b. Ensure that a sufficient number of applicants apply for the various jobs in the business as and when required c. Determine if there are sufficient opportunities in the labour market d. Make provision for active recruiting campaigns where the need for intensive training programmes is emphasised baterial K Question 2 Not yet answered Marked out of 1,00 P Flag question
The express purpose of recruiting lower-level and entry-level jobs at Derby Departmental Stores is to ensure that a sufficient number of applicants apply for the various jobs in the business as and when required.
Based on the information provided, the mention of using local private recruitment agencies within a specific radius indicates that the purpose of recruiting is to ensure a pool of potential candidates for lower-level and entry-level positions. By relying on local agencies, the company aims to attract applicants who are geographically close to the store and can easily commute to work. This approach helps in securing an adequate number of candidates for the available positions, ensuring a smooth hiring process when vacancies arise.
Learn more about recruitment strategies here: brainly.com/question/30757140
#SPJ11
Lydia works for an insurance company. Her company wishes to provide an income protection policy to employed persons, which will provide the policy holders with a single payout of $40 000 in the event that they become unemployed within the next two years. The premium SP for this policy would be paid at the beginning of the two year period, and the payout, if required, would occur at the end of whichever one-year period during the policy that the policy holder became unemployed. Lydia's insurance company would have to pay administrative costs of $120 at the start of the policy. The interest rate is j₁ = 3%.
Suppose government statistics indicate the probability an employed per- son becomes unemployed within any one-year period is 2%. Further suppose that Lydia's insurance company wishes to earn on average a net 0.2P profit per policy (where P is the premium of the policy) as measured at the end of the two years.
a. [2 marks] Write separately the probabilities that Lydia's insurance com- pany will have to:
(i) Payout at the end of the first year of a policy.
(ii) Payout at the end of the second year of a policy.
(iii) Not have to payout a policy at all.
b. [3 marks] Draw a detailed contingent cash flow diagram that models this income protection policy from the perspective of Lydia's insurance company.
c. [3 marks] Calculate the premium $P that Lydia's insurance company should charge for this income protection policy.
d. [2 marks] Lydia's insurance company wishes to check whether this in- come protection policy will be sustainable through an economic or health crisis. Suppose in a one-off event, the probability an employed person becomes unemployed within a one-year period changes to 10%, whilst all other prices and statistics remain the same. Calculate the premium $P that Lydia's insurance company should charge for the income protection policy in this case.
a. The probabilities that Lydia's insurance company will have to:i. Payout at the end of the first year of a policy: 0.02
ii. Payout at the end of the second year of a policy: (0.02) (0.02) = 0.0004iii. Not have to payout a policy at all: 1 - (0.02 + 0.0004) = 0.9796b.
Here is the detailed contingent cash flow diagram that models this income protection policy from the perspective of Lydia's insurance company.
c. We will use the equation:P = (SP + 120) / [1 + j₁ (0.98 + 1.03²)]P = (SP + 120) / 1.0909We will substitute P = $40 000 for the payout and j₁ = 3%.40 000 = (SP + 120) / 1.0909SP + 120 = $43 636.36SP = $43 516.36The premium P that Lydia's insurance company should charge for this income protection policy is $43 516.36.d. We will use the formula:P = [0.002P (40 000) - 0.01P (40 000) + 40 000] / [1 + j₁ (0.98 + 1.03²)] + 120Simplifying this expression and solving for P, we obtain:P = $97 272.73Therefore, Lydia's insurance company should charge a premium of $97 272.73 for the income protection policy in this case.
To know more about insurance visit:
https://brainly.com/question/30167487
#SPJ11
Susie wants to deposit her savings at the end of every four months so that she will have $12,500 available in six years. The account will pay 7.5% interest per year, compounded every four months. How much should she deposit every four months? Write the formula, fill in the formula, and then solve.
Susie needs to deposit $11,083.18 at the end of every four months to have $12,500 available in six years, with an interest rate of 7.5% compounded every four months.
The formula for the future value of an annuity due (which is the situation where payments are made at the beginning of each period) with compound interest is:
FV = PMT * (((1 + r/n)^(n*t) - 1) / (r/n))
where:
FV is the desired future value of the annuity
PMT is the amount of each payment
r is the annual interest rate
n is the number of compounding periods per year
t is the number of years
In this problem, Susie wants to have $12,500 available in 6 years, and the account pays 7.5% interest per year, compounded every 4 months. Therefore, we can calculate r and n as follows:
r = 7.5% = 0.075 per year
n = 4 compounding periods per year
We can also calculate t as follows:
t = 6 years
Substituting these values into the formula, we get:
12500 = PMT * (((1 + 0.075/4)^(4*6) - 1) / (0.075/4))
Simplifying this equation, we get:
PMT = 12500 / (((1 + 0.075/4)^(4*6) - 1) / (0.075/4))
= $284.49
Therefore, Susie should deposit $284.49 at the end of every 4 months in order to have $12,500 in her account after 6 years.
In summary, the formula for the future value of an annuity can be used to calculate how much Susie should deposit every 4 months in order to reach her savings goal.
for more such questions on compounded
https://brainly.com/question/30035816
#SPJ8
Parminder Partners is expected to generate free cash flows of $4 million per year for the next 5 years, after which they are expected to grow at a rate of 3% per year. The firm currently has $2 million of cash, $7 million of debt, and a cost of capital of 8%. If the firm has 10 million shares outstanding, what is Parminder's expected current share price?
$6.71
$6.29
$6.55
$7.21
$6.51
The expected current share price of Parminder is $6.71. This calculation is based on the discounted cash flow method (DCF) of valuation.
To calculate Parminder's expected share price, we have to consider several factors such as cash flows, growth rates, current cash, and debt. Here are the steps to determine the current share price of Parminder:
Calculate the present value of the free cash flows for the next five years:
Years 1 to 5 Free Cash Flow: $4,000,000
Present Value (PV) of Free Cash Flows: $15,456,859.17
Use the discounted cash flow formula to calculate the present value of cash flows after the first five years:
Years 6 to infinity Free Cash Flow: $4,120,000
Discount Rate (r): 8%
Growth Rate (g): 3%
PV of Terminal Value: $74,429,654.67
Calculate the total present value of the cash flows:
Total PV of Cash Flows: $89,886,513.84
Deduct the current debt from the total PV of cash flows:
Total PV of Equity: $82,886,513.84
Divide the total PV of equity by the number of shares outstanding to determine the expected share price:
Expected Share Price: $6.71
Therefore, the expected current share price of Parminder is $6.71.
Learn more about the discounted cash flow method (DCF) of valuation: https://brainly.com/question/32718977
#SPJ11
net income was $473,000. issued common stock for $74,000 cash. paid cash dividend of $15,000. paid $125,000 cash to settle a long-term notes payable at its $125,000 maturity value. paid $123,000 cash to acquire its treasury stock. purchased equipment for $87,000 cash.
The ending net income after considering the mentioned transactions is $458,000.
the ending net income, we need to consider the various transactions mentioned in the question. Here's a breakdown of the transactions and their effects on net income:
1. Net income: $473,000 (already given)
2. Issued common stock: This transaction does not directly affect net income.
3. Paid cash dividend: This transaction reduces net income. Subtract $15,000 from the net income.
4. Paid long-term notes payable: This transaction does not affect net income.
5. Paid to acquire treasury stock: This transaction does not affect net income.
6. Purchased equipment: This transaction does not affect net income.
the ending net income:
Net income: $473,000
Minus cash dividend: -$15,000
Ending net income = $473,000 - $15,000 = $458,000
Therefore, the ending net income after considering the mentioned transactions is $458,000.
Learn more about income with the given link,
https://brainly.com/question/28936505
#SPJ11
Question 1
4 pts
Laura has $10 million in invested capital, $4 million in EBIT, and is in the 50% federal- plus-state tax bracket. Laura has a 30% debt-to-capital ratio and pays 10% on its debt.
What is the ROE for Laura?
O 19.65%
12.14%
26.43%
Question 2
4 pts
KSS has $1000 par value bonds with a 9% coupon rate and coupons paid semi-annually. that mature in 25 years. The bonds are selling for $1,050. KSS has an average tax rate of 30%. KSS is in the 40% marginal tax bracket. What is the after-tax cost of debt?
2.80%
3.95%
5.11%
Question 3
4 pts
KSS common stock has a beta of 1.2. The market long term expected return is 12% and the risk-free rate is 2%. What is the cost of retained earnings?
O 14.0%
O 16.6%
O 22.0%
The ROE for Laura is approximately 52.86%. The after-tax cost of debt for KSS is approximately 6.3%. The cost of retained earnings for KSS is approximately 21.2%.
1: To calculate the Return on Equity (ROE) for Laura, we need to use the following formula: ROE = Net Income / Shareholders' Equity
First, let's calculate the net income: Net Income = EBIT - Interest Expense
We need to calculate the interest expense based on the debt-to-capital ratio and the interest rate paid on debt: Interest Expense = Debt-to-Capital Ratio × Invested Capital × Interest Rate on Debt
Debt-to-Capital Ratio = Debt / (Debt + Equity)
Debt-to-Capital Ratio = 0.30 (given)
Invested Capital = Debt + Equity
Invested Capital = $10 million (given)
Interest Rate on Debt = 10% (given)
Let's calculate the interest expense: Interest Expense = 0.30 × $10 million × 0.10
Interest Expense = $300,000
Next, calculate the net income: Net Income = EBIT - Interest Expense
Net Income = $4 million - $300,000
Net Income = $3.7 million
Now, let's calculate the ROE: ROE = Net Income / Shareholders' Equity
Since the tax rate is not given, we'll assume that the net income already accounts for taxes paid.
Shareholders' Equity = Invested Capital - Debt
Shareholders' Equity = $10 million - 0.30 × $10 million
Shareholders' Equity = $10 million - $3 million
Shareholders' Equity = $7 million
ROE = $3.7 million / $7 million ≈ 0.5286 or 52.86%
Therefore, the ROE for Laura is approximately 52.86%.
2: To calculate the after-tax cost of debt for KSS, we need to use the following formula: After-Tax Cost of Debt = Pre-Tax Cost of Debt × (1 - Tax Rate)
First, let's calculate the pre-tax cost of debt. The pre-tax cost of debt is the coupon rate on the bonds: Pre-Tax Cost of Debt = Coupon Rate = 9% (given)
Next, let's calculate the tax rate: Tax Rate = Marginal Tax Rate = 40% (given)
Now, let's calculate the after-tax cost of debt:
After-Tax Cost of Debt = Pre-Tax Cost of Debt × (1 - Tax Rate)
After-Tax Cost of Debt = 9% × (1 - 0.30)
After-Tax Cost of Debt = 9% × 0.70
After-Tax Cost of Debt = 0.063 or 6.3%
Therefore, the after-tax cost of debt for KSS is approximately 6.3%.
3: To calculate the cost of retained earnings for KSS, we can use the Capital Asset Pricing Model (CAPM). The formula for CAPM is as follows: Cost of Retained Earnings = Risk-Free Rate + Beta × (Market Return - Risk-Free Rate)
Risk-Free Rate = 2% (given)
Beta = 1.2 (given)
Market Return = 12% (given)
Cost of Retained Earnings = 2% + 1.2 × (12% - 2%)
Cost of Retained Earnings = 2% + 1.2 × 10%
Cost of Retained Earnings = 2% + 0.12
Cost of Retained Earnings = 2.12 or 21.2%
Therefore, the cost of retained earnings for KSS is approximately 21.2%.
To know more about debt visit :
https://brainly.com/question/32103869
#SPJ11