I only have enough credit for one more question. I am aware that the rule states
ID: 2562167 • Letter: I
Question
I only have enough credit for one more question. I am aware that the rule states you only need to solve a limit of 5 answers. However, in this case there are people who are willing to help answer all of them. If you are one of them, please kindly help me answer all of these questions.
Please don't just answer the first question or the five questionsa, otherwise I'll hit the dislike button. Thank you
6. Factors that affect the WACC equation Each of the following factors affects the weighted average cost of capital (WACC) equation. Which are factors thata firm can control? Check all that apply. The firm's capital budgeting decision rules Interest rates in the economy Tax rates The firm's capital structure The impact of cost of capital on managerial decision:s Consider the following case: Acme Manufacturing Corporation has two divisions, L and H. Division L is the company's low-risk division and would have a weighted average cost of capital of 8% if it was operated as an independent company. Division H is the company's high-risk division and would have a weighted average cost of capital of 14% if it was operated as an independent company. Because the two divisions are the same size, the company has a composite weighted average cost of capital of 11%. Division H is considering a project with an expected return of 12%. Should Acme Manufacturing Corporation accept or reject the project? O Reject the project O Accept the project On what grounds do you base your accept-reject decision? O Division H's project should be accepted, as its return is greater than the risk-based cost of capital for the division O Division H's project should be rejected since its return is less than the risk-based cost of capital for the division.Explanation / Answer
Answer
1 - Firms capital structure
2 - accept the project
3- Division project should be accepted, its return greater than its cost of capital for the division
4- Less risky over time , Increase the value over the time
5- A company needs to adjust for the cost of debt for tax as interest is deductable for tax
6 - Fruit company will receive 97.8
7- cost of preferred stock will be 8.18%