A firm is financed by 40% debt and 60% stock. Its corporate tax rate is...
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Finance
A firm is financed by 40% debt and 60% stock. Its corporate tax rate is 35%. Its cost of debt is 5%. Its cost of stock is 4%. What is its weighted average cost of capital?
Answer: 4.4% // 2.4% // 3.7% // or 4.6%
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The following balance sheet data pertain to N&H Company. What is next year's capital budget?
| Item | Current Year Actual | Next Year |
| Cash | $ 100 | $ 105 |
| Accounts receivable | $ 1,500 | $ 1,575 |
| Inventories | $ 1,200 | $ 1,260 |
| Net plant and equip. | $ 8,500 | $ 8,925 |
| Accounts payable | $ 800 | $ 840 |
| Accruals | $ 200 | $ 210 |
Ans: $10.605 // $515 //$ 10.300 // $615
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