Business, 09.04.2021 03:20 leslie122372

Universal Foods has a debt-to-value ratio of 36%, its debt is currently selling on a yield of 8%, and its cost of equity is 12%. The corporate tax rate is 40%. The company is now evaluating a new venture into home computer systems. The internal rate of return on this venture is estimated at 13.4%. WACCs of firms in the personal computer industry tend to average around 14%. a. What is Universal's WACC? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
WACC
b. Will Universal make the correct decision if it discounts cash flows on the proposed venture at the firm's WACC?
A. Yes
B. No
c. Should the new project be pursued?
A. Yes
B. No

Answers: 2

Show answers

Another question on Business

Business, 22.06.2019 15:10

Paddock pools constructed a swimming pool and deck for the jensens' home. paddock installed the wrong trim on the pool. it would cost $2800 to change the trim-one-fifth of the total cost of the pool. the jensens refuse to pay anything for the pool. the paddock's best defense is: (a) duress (b) substanial performance (c)mistake (d) failure of conditions

Answers: 3

Answer

Business, 22.06.2019 16:30

Who got instagram! ? if you do give it to me

Answers: 1

Answer

Business, 22.06.2019 18:10

Ashop owner uses a reorder point approach to restocking a certain raw material. lead time is six days. usage of the material during lead time is normally distributed with a mean of 42 pounds and a standard deviation of four pounds. when should the raw material be reordered if the acceptable risk of a stockout is 3 percent?

Answers: 1

Answer

Business, 22.06.2019 19:50

Joe pays ann to mow his lawn and ann mows vanna's lawn by mistake. vanna peers out her window and sees ann mowing, yet says nothing to ann about her mistake since vanna needs to have her lawn mowed. when ann approaches vanna for payment, vanna refuses, arguing that she never asked ann to mow her lawn. under these circumstances, ann can recover payment from vanna under:

Answers: 1

Answer

You know the right answer?

Universal Foods has a debt-to-value ratio of 36%, its debt is currently selling on a yield of 8%, an...

Questions