Pan American Airlines' shares are currently trading at $69.25 each. The yield on Pan Am's debt is 4% and the firm's beta is 0.7. The T-Bill rate is 4% and the expected return on the market (E (kM)) is 9%
The company's target capital structure is 25% debt and 75% equity. Pan American Airlines pays a combined federal and state tax rate of 35%. What is Pan Am's cost of equity?
A) 7.0%
B) 7.5%
C) 8.0%
D) 8.5%
E) 9.0%
B
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The Everest Company has income from operations of $80,000, invested assets of $500,000, and sales of $1,030,000. What is the investment turnover?
A) 6.25 B) 2.06 C) .49 D) 12.88
Why is the market price of a corporation's common stock likely to increase?
What will be an ideal response?
Postage Corporation receives management consulting services from its 92 percent-owned subsidiary, Stamp Inc. During 20X7, Postage paid Stamp $125,432 for its services. For the year 20X8, Stamp billed Postage $140,000 for such services and collected all but $7,900 by year-end. Stamp's labor cost and other associated costs for the employees providing services to Postage totaled $86,000 in 20X7 and $121,000 in 20X8. Postage reported $2,567,000 of income from its own separate operations for 20X8, and Stamp reported net income of $695,000.Based on the preceding information, what amount of income should be assigned to the noncontrolling shareholders in the consolidated income statement for 20X8?
A. $44,400 B. $55,600 C. $60,000 D. $47,700
The type of EC transactions used by Zappos are
A) business-to-business. B) business-to-business-to-consumer. C) business-to-consumer. D) consumer-to-business.