Masterson, Inc., has 3.7 million shares of common stock outstanding. The current share price is $86.00, and the book value per share is $9.50. The company also has two bond issues outstanding. The first bond issue has a face value of $74 million, a coupon rate of 5.4 percent, and sells for 95.8 percent of par. The second issue has a face value of $46 million, a coupon rate of 5.9 percent, and sells for 105.1 percent of par. The first issue matures in 24 years, the second in 12 years. The most recent dividend was $4.07 and the dividend growth rate is 4.4 percent. Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is 24 percent. a) What is the company’s cost of equity?
b) What is the company’s aftertax cost of debt?
c) What is the company’s weight of equity?
d) What is the company’s weight of debt?
e) What is the company’s WACC?

Select the correct answer the smith family adopted a child. the adoption procedure took about three months, and the family incurred various expenses. will the smiths receive and financial benefit for the taxable year? a) they will not receive any financial benefit for adopting the child b) their income tax component will decrease c) they will receive childcare grants d) they will receive a tax credit for the cost borne for adopting the child e) they will receive several tax deductions

Shelby company produces three products: product x, product y, and product z. data concerning the three products follow (per unit): product x product y product z selling price $ 85 $ 65 $ 75 variable expenses: direct materials 25.50 19.50 5.25 labor and overhead 25.50 29.25 47.25 total variable expenses 51.00 48.75 52.50 contribution margin $ 34.00 $ 16.25 $ 22.50 contribution margin ratio 40 % 25 % 30 % demand for the company’s products is very strong, with far more orders each month than the company can produce with the available raw materials. the same material is used in each product. the material costs $8 per pound, with a maximum of 4,400 pounds available each month. required: a. compute contribution margin per pound of materials used. (round your intermediate calculations and final answers to 2 decimal places.) contribution margin per pound product x $ product y $ product z $ b. which orders would you advise the company to accept first, those for product x, for product y, or for product z? which orders second? third? product x product y product z

In 1975, mcdonald’s introduced its egg mcmuffin breakfast sandwich, which remains popular and profitable today. this longevity illustrates the idea of: