At the end of ome Depot's total capitalization amounted to $29,031 million. In 2012 debt investors received interest income of $648 million. Net income to shareholders was $1187 million (Assume a tax rate of 25%
Q: What should be the price of a 8year zero-coupon bond with a face value of $1000 where zero-coupond…
A: A zero coupon bond in economics is classified as the bond which is actually a debt security that…
Q: Twenty years from now, Angelo plans to buy a new motorbike worth BD10,000. The current rate of…
A: FV = 10,000 r = 8% n = 20
Q: Looking at the scope of central planning in the Soviet Union post WW-II, between 1951 and 1960 the…
A: Russia was following the centralised system of economic planning where the central authority was…
Q: Table) Based on the table, what is the average total product when John's Salsa Company hires three…
A: "Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: The decision by the Bank of Canada and many other central banke to target the rate of inflation…
A: A central banking strategy known as inflation targeting involves modifying monetary policy to attain…
Q: Refer to the tables in Questions 2 and 3 to identify which of the below is correct. Select all…
A: Introduction Break even point is where total revenue will be equal to total expenses. Here total…
Q: Cost minimization when output is unknown an total costs are known. A factory that you are managing…
A: Given information: Q = 2K0.5L0.5 ----------> Production function…
Q: Question 2: Suppose that daily demand for breakfast sandwiches at a local store is given by the…
A: Price elasticity of demand is an estimation of the adjustment of consumption of a product…
Q: The rate of interest written on a contract between a borrower and a lender is the
A: Interest rate is the cost of borrowing money or fund from the market. The rise in the interest rate…
Q: Labor Total Product Marginal Product Average Prod 0 1 2 345 6 7 8 0 Blank 1 25 Blank 5 Blank 7 Blank…
A: Total Product refers to the total output produced by a firm. Marginal Product refers to the…
Q: What is the economic rationale for single payer health insurance? Discuss the economic principles…
A: Health economics is used to promote healthy lifestyles and positive health outcomes through the…
Q: Product X currently sells for $12 per unit. The variable costs is $4 per unit and 10,000 units are…
A: Here(break-even), where your income (deals or turnover) approaches(equals) total costs. At…
Q: An integrated, combined cycle power plant produces 285 MW of electricity by gasifying coal. The…
A:
Q: b. Demonstrate graphically with the multiplier model a shift in the AE curve that would have caused…
A: The intersection point of the 45-degree line and the aggregate expenditure line gives the…
Q: According to this, which of the following statements best explain the labor participation change?
A: Labor force participation rate = Labor force / Total working age population The LFPR will decrease…
Q: lls CrunchyCrunch for a price of $10 with a marginal cost of $6. Firm 2 sells FibryFibre for a price…
A: Marginal cost: It refers to the cost that changes with a change in output. The marginal cost of the…
Q: QUESTION 20 Which of the following is correct? O A. The Bureau of Labor Statistics produces data on…
A: INTRODUCTION: The Bureau of Labor Statistics (BLS) is a federal agency that does collect and…
Q: Suppose the civilian non-institutional population equals 125,000 persons; the civilian labor force…
A: Labor Force The number of employed persons plus the number of jobless people seeking work is known…
Q: 920 it bait of 289301 Sindspis ON SEU pilkupeni A30S AO +32 monulo2 An economist for a sporting…
A: Given: Revenue function R(x)=-x2+10xCost functionC(x)=4x+5
Q: .If MR > MC, the monopolist should: MR = Marginal Revenue MC Marginal Cost Group of answer choices…
A: A monopoly is made up of just one business that controls an entire sector. A monopoly may emerge…
Q: Fill in the blanks in the following table and then answer the question that follows. (Note: Round…
A: Marginal Product = Change in Total Product / Change in Input Average Product = Total Product / Units…
Q: he real risk-free rate is 3.25%. Inflation is expected to be 4.25% this year, 4.45% next year, and…
A:
Q: Figure: The vertical distance between points A and C represents a tax in the ma 1000 Price 900 800-…
A: The tax is imposed by the government, and it is distributed between the buyers and sellers based on…
Q: If your nominal income rose by 5.3 percent and the price level rose by 3.8 percent in some year, by…
A: Real income is income adjusted for inflation where nominal income does not account for price…
Q: 10 OT Depot's capitalization amounted to $29,031 million. In 2012 debt investors received interest…
A: The payment received by an individual or a firm or business entity for any work performed or sale…
Q: There are 11 identical internet service providers (ISPs) in a city serving a market demand with an…
A: Elasticity of demand measures the the responsiveness of percentage change in quantity demanded due…
Q: Harare Zimbabwe's central bank today raised its key interest ra From 50 percent to 70 percent. The…
A: Given information: Zimbabwe raised the key interest rate from 50% to 70% The inflation rate is 200%…
Q: Select all true statements about the evolution of inequality in Canada between 1975 and 2019…
A: If we look at data from the World bank, we will get the data of the Gini Coefficient for the country…
Q: CENGAGE MINDTAP omework(Ch 13) 1. Definition of economic costs Sean lives in Detroit and runs a…
A: Explicit cost refers to the cost which is incurred for running a business. It includes the payments…
Q: You are serving as the chair for your community’s annual wellness campaign. A key event is the…
A: * Average variable cost:- When variable cost is divided by output amount, the result is the average…
Q: What is the lost consumer surplus due to the tax (in $millions)?
A: The lost consumer surplus is this yellow area Try find this area.
Q: In a perfectly competitive market, each firm has a long-run total cost given by LTC = 100Q - 10Q² +…
A: In a long-term equilibrium with perfect competition, the product's price equals the firm's minimum…
Q: Provide the answer for the requirements Price/unit (Pesos) 20 40 60 80 100 120 below. Show all…
A: Derive the following with complete solution.a. Equilibrium quantityb. Equilibrium price
Q: As the Federal Reserve sharply raises rates in the face if substantial inflationary pressures,…
A: Inflationary pressure is the continuous increase in the general price level in an economy. During…
Q: A firm that has as its objective the maximization of revenues rather than profits would produce an…
A: Revenue maximization is the hypothesis that assuming that you sell your products at a sufficiently…
Q: price 8f coffe would 5. Which country(ies) would gain from free trade? 3. Two countries, Taiwan and…
A: Autarky is a kind of self-reliance and restricted trade that is commonly characterized as a form of…
Q: Discuss ONE idea from the course so far that you find most interesting and actually useful in real…
A: Microeconomics is the study of principles of economics that apply to the behavior of individuals…
Q: SGBP Plantation Sdn Bhd plans to buy a new palm oil truck. There are THREE (3) alternative brands to…
A: Cash flow diagram depicts cash flows on a horizontal line with inflows represented by upward arrows…
Q: If your nominal income rose by 5.3 percent and the price level rose by 3.8 percent in some year, by…
A: Real and Nominal Income:- Real income is the amount of money an organisation or person earns while…
Q: The market imperfection brought about by monopoly is referred to as: a. price discrimination. O b.…
A: A monopoly is a market structure in which there is only one seller selling a unique product which…
Q: 26The country of Caspir produces only cereal and milk. Quantities and prices of these goods for the…
A: Nominal GDP measures the market value of final goods and services at current year prices. Real GDP…
Q: 5- What is the money multiplier when the required reserve ratio is a. 2 percent? b. 4 percent? c. 6…
A: The reserve ratio is a part of demand deposit which is kept in liquid form or reserve. It is kept to…
Q: Which of the following is not a source of economic growth? OA. appropriate incentive system OB.…
A: By and large, are two fundamental wellsprings of monetary development: development in the size of…
Q: (b) SGBP Plantation Sdn Bhd plans to buy a new palm oil truck. There are THREE (3) alternative…
A: Cash flow diagram depicts cash flows on a horizontal line with inflows represented by upward arrows…
Q: The figure shows the demand curve for Price 8- 7- 6- 5- 3- 2- 04 0 10 20 30 40 50 60 70 80 90…
A: The consumer surplus is the benefits earned by the consumers in the market at the equilibrium or…
Q: pose we have two people in the market: A, B. Their utility functions are UA = = min{x₁,2). Solve…
A: The consumer chooses consumption of the 2 products therefore, marginal rate of substitution equals…
Q: Tom's technology is given by the following production function: m = x 1 1 4 4 Y If m represents his…
A: This production function is Cobb-Douglas production function. Now here we are calculating here…
Q: d. What long-run adjustments should you expect? Explain. O Entry will occur until profits are zero.…
A: Monopolistically competitive market maximizes profit where the marginal revenue is equal to marginal…
Q: d. If P increases by 4%, what would happen (in percentage terms) to quantity demanded? e. If M…
A: Demand analysis deals with the estimation of demand/sales based on available historic data for the…
Q: Firm increases its advertisement expenditure from $ 60000 to 75000. It's sale increases by 20% from…
A: Given the initial advertisement expenditure = $60000 Final advertisement expenditure = $75000…
::+
Step by step
Solved in 2 steps
- Calculate the cost of preferred stock Current assets $2,000 Net fixed assets 3,000 Total assets $5,000 Total debt $2,100 Preferred stock 250 Common stock 1,300 Retained earnings 1,350 Total common equity $2,650 Total liabilities & equity $5,000 The firm's marginal tax rate is 35%. The firm's currently outstanding 10% annual coupon rate long-term debt sells at $1,051.11. The debt matures in 7 years. Coupon interest is paid semiannually. Skye's preferred stock pays a dividend of $3.30 per share, and its preferred stock sells for $30 per share. Skye's earnings per share last year were $3.20. The common stock sells for $55.00, last year’s dividend (D0) was $2.10, and a flotation cost (i.e, f ) of 10% would be required to sell new common stock. Security analysts are projecting that the common dividend will grow at an annual rate of 9%. The market risk premium is 5%, the risk-free rate is 6%, and Skye's beta is 1.516.ECONOMICS At the end of 2011 Home Depot's total capitalization amounted to $29,031 million. In 2012 debt investors received interest income of $648 million. Net income to shareholders was $4,487 million. (Assume a tax rate of 35%.) Calculate the economic value added assuming its cost of capital is 10%. (Do not round intermediate calculations. Give your answer in millions rounded to 2 decimal places.)How would each of the following scenarios affect a firm's cost of debt, r d (l - t), t=tax rate; its cost of equity, rs; and its WACC? Indicate with an increase (I), a decreease (D), or no change (N) whether the factor would raise, lower, or have an indeterminate effect on the item in question. Assume for each answer that other things are held constant, even though in some instances this would probably not be true. rd (1-t) rs WACC 1) The corporate tax rate is lowered. 2) The Federal Reserve tightens credit. 3) The firm uses more debt; that is, it increases its debt ratio 4) The dividend payout ratio is increased.
- 4- As a prospective owner of a club known as the Red Rose, you are interested in determining the volume of salesdollars necessary for the coming year to reach the break-even point. You have decided to break down the salesfor the club into four categories, the first category being beer. Your estimate of the beer sales is that 30,000 drinkswill be served. The selling price for each unit will average $1.50; the cost is $.75. The second major category ismeals, which you expect to be 10,000 units with an average price of $10.00 and a cost of $5.00. The third majorcat- egory is desserts and wine, of which you also expect to sell 10,000 units, but with an average price of $2.50per unit sold and a cost of $1.00 per unit. The final category is lunches and inexpensive sandwiches, which youexpect to total 20,000 units at an average price of $6.25 with a food cost of $3.25. Your fixed cost (i.e., rent,utilities, and so on) is $1,800 per month plus $2,000 per month for entertainment.a) What is your…The board of directors of Divided Airlines has declared a dividend of $2.50 per share pay able on Tuesday, May 30, to shareholders of record as of TuesdayMay 9. Cal buys 100 shares of Divided on Tuesday, May 2, for $ 150 per share. What is the ex date? Describe the events that will occur with regard to the cash dividend and the stock price.You expect KT Industries (KTI) will have earnings per share of $4.6 this year and expect that they will pay out $1.66 of these earnings to shareholders in the form of a dividend. KTI's return on new investments is 11% and their equity cost of capital is 16%. KTI's dividend growth rate is _________ (Round to two decimal places) If KTI's dividend growth rate will remain constant, and KTI's next year dividend is $1.78, then KTI's current stock price should be ________ (Round to two decimal places)
- The Rosy company, is planning to start an egg packing factory in the country of Bevery. The initial investment for the egg packing factory is $5Million and it will generate net revenues for every year for the next 10 years starting as $1M in the first year, and increasing by $0.5Million every year (e.g, 1M, 1.5M, 2M, 2.5M...). Currently £1 is equal to $20. However, the $ is being devalued (losing value) against the £ by 12% every year (so next year £1 will be $22.4 ). If Rosy company has a MARR of 30% in Bevery, what is the PW of this egg packing factory in £?b) Adagio Corporation has return on equity (ROE) of 20% and its plowback ratio is p. The ROE and the plowback ratio are expected to stay the same in all future periods. The company's earnings are expected to be £4 per share next year. The cost of capital is 15%. What is the present value of growth opportunities of this corporation as a function of p? Calculate the present value of its growth opportunities for p = 30%.Loreto Incorporated has the following financial ratios: asset turnover = 1.60; net profit margin (i.e., net income/sales) = 6%; payout ratio = 30%; equity/assets = 0.50. What is Loreto's sustainable growth rate? What is its internal growth rate? Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.
- Firms A and B are identical except for their capital structure. A carries no debt, whereas B carries £60m of debt on which it pays a 5% interest rate. Assume no transaction costs, no taxes and risk-free debt. The relevant numbers are provided in the following table (in £ m): A B Value of Firm 100 120 Debt 0 60 Equity 100 60 Projected earnings before interest 12 12 Interest payment 0 3 Interest rate Not Applicable 5% Please answer the following questions a) "The situation described in the table is consistent with the absence of arbitrage opportunities". True or False (T/F)? b) Which one of the two firms is relatively overvalued (A/B)? c) "B's shares carry more risk than A's shares". True or False (T/F)? d) What is the return to an investor holding a 10% stake in B (in £ '000)? e) Consider an investor who wants to purchase a 20% stake in A. If he wished to replicate B's capital structure through homemade leverage,…Hydro Systems Engineering Associates, Inc., provides consulting services to city water authorities. The consulting firm’s contribution-margin ratio is 15 percent, and its annual fixed expenses are $245,000. The firm’s income-tax rate is 30 percent. Required:1. Calculate the firm’s break-even volume of service revenue.2. How much before-tax income must the firm earn to make an after-tax net income of $138,000?3. What level of revenue for consulting services must the firm generate to earn an after-tax net income of $138,000?4. Suppose the firm’s income-tax rate changes to 20 percent. What will happen to the break-even level of consulting service revenue? Calculate the firm’s break-even volume of service revenue. How much before-tax income must the firm earn to make an after-tax net income of $138,000? What level of revenue for consulting services must the firm generate to earn an after-tax net income of $138,000? (Do not round intermediate calculations. Round your final answers to the…Consider company ABC. Today it is 1st of January 2023 and ABC has just paid a dividend of £3 million. The expected earnings of ABC for the next 30 years are forecast to grow at a rate of 15% per annum. From 1st of January 2053 and onwards the earnings of ABC are expected to grow at a rate of 5%. The required rate of return of ABC is 12% per annum. The current dividend policy of ABC is such that they pay out 50% of its earnings as dividends (assume that they pay their dividends on 1st of January every year). a) Suppose that the dividend payout ratio is expected to stay constant in the future. What is the value of ABC stock? Show and explain your calculations and any assumptions you make. b) Just after the dividend payment on 1st of January 2043, ABC is planning to reduce their dividends and only pay out 40% of its earnings. What is the value of ABC under the new dividend policy? c) Provide a recommendation to the management of ABC as to whether they should increase/cut back on…