Dr. Osorno was served with a malpractice lawsuit based on allegedly removing the wrong organ. Following discovery, it becomes clear that the plaintiff has no credible evidence against the doctor, and that no reasonable jury could rule in the plaintiff's favor. How should Dr. Osorno's lawyer proceed?a. The lawyer should make a motion for summary judgment.
b. The lawyer should make a motion for additional discovery.
c. The lawyer should make a motion to amend the answer in order to make a motion to dismiss.
d. The lawyer should file a motion for judgment on the pleadings.
e. The lawyer should proceed to trial.
Answers
Answer:
Correct option is A.
The lawyer should make a motion for summary judgement
Explanation:
A movement for rundown judgement is Sled offer the disclosure procedure attesting that no truthful debates exist and that if the appointed authority applied the law to the undisputed realities, her solitary sensible choice would be agreeable to the moving party.
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Classify the following markets as perfectly competitive, monopolistic, or monopolistically competitive, and explain your answers.Wooden no. 2 pencilsCopper (hint: there are many sellers)Local public utilities (ex. water, electricity)Peanut butterLipstick
Answers
Answer:Mary wins because Melissa failed to object to the merchant's confirmation memorandum.
Explanation:
A contract is first establish based on offer and acceptance between two parties. The telephone conversation of Mellisa to Mary constitute a valid offer and the email communication of Mary constitute a valid acceptance.
Furthermore the time interval between the email communication and delivery of the goods are enough period for Mellisa to counter the acceptance memorandum of Mary which she failed to carry out. This is the reason Mary wins.
Answers
Answer:Summary task
Explanation:
B.free enterprise.
C.international trade.
D.business competition.
Answers
Answer:
C.international trade
Explanation:
In business, resources are tangible materials used in the production process. Natural resources are valuable materials found beneath, above, or on the earth's surface. These materials are naturally occurring and are distributed unevenly across the globe. They include Minerals, forests, fertile lands, water, oil and gas, plants, and animals.
Some resources, such as minerals and water, become raw materials, while others, such as land, facilitate the production process. Because resources are unevenly distributed, regions with plenty can use them to produce goods and services and sell to areas with scarcity. No single region has the resources it requires. International trade makes it possible for regions to sell what they have in plenty and buy what they luck.
b. What is the company's unlevered cost of equity capital?
c-1. What would the cost of equity be if the debt-equity ratio were 2?
c-2. What would the cost of equity be if the debt-equity ratio were 1.0?
c-3. What would the cost of equity be if the debt-equity ratio were zero?
Answers
Answer: a. WACC = Ke(E/V} + kd(D/V)(1-T)
9.1 = ke(100/160) + 6.4(60/160)(1-0.22)
9.1 = ke(0.625) + 2.4(0.78)
9.1 = 0.625ke + 1.872
9.1-1.872 = 0.625ke
7.228 = 0.625ke
ke = 7.228/0.625
ke = 11.56%
b. WACC = Ke(E/V)
9.1 = ke(100/160)
9.1 = 0.625ke
ke = 9.1/0.625
ke = 14.56%
c-1. WACC = Ke(E/V} + kd(D/V)(1-T)
9.1 = ke(1/3) + 6.4(2/3)(1-0.22)
9.1 = 0.3333ke + 3.328
9.1 - 3.328 = 0.3333ke
5.772 = 0.3333ke
ke = 5.772/0.3333
ke = 17.32%
c-2. 9.1 = ke(1/2) + 6.4(1/2)(1-0.22)
9.1 = 0.5ke + 2.496
9.1 - 2.496 = 0.5ke
6.604 = 0.5ke
ke = 6.604/0.5
ke = 13.21%
c-3. 9.1 = ke (0/0) + kd (0/)
ke = 0%
Explanation:
a. in the a part of the question, the debt-equity ratio was 0.6 ie 60/100. Thus, the value of the firm equals 160. The figures given in the question were substituted in the formula. Cost of equity was not provided, therefore, it becomes the subject of the formula. The variables are defined as follows:
ke = Cost of equity = ?
kd = Cost of debt = 6.4%
E = Value of equity = 100
D = Value of debt = 60
V = Value of the firm ie E + D = 100 + 60 = 160
T = Tax rate = 22% = 0.22
b. In this part of the question, only equity would be considered since we are calculating unlevered cost of equity. The part of the formula that deals with debt will be ignored.
c-1. In this case, the debt-equity ratio is 2. Therefore, debt equals 2 while equity is 1. The value of the firm becomes 3. There is need to substitute these values in the original formula while other variables remain constant.
c-2. In this scenario, the debt-equity ratio is 1. Thus, equity is 1 and debt is also 1. The value of the company changes to 2. These new values would be substituted in the formula in order to obtain the new cost of equity.
c-3. since the debt-equity ratio is 0, therefore, the cost of equity equals 0.
Final answer:
a. The company's cost of equity capital is 8.6014%. b. The company's unlevered cost of equity capital is 5.8729%. c-1. If the debt-equity ratio were 2, the cost of equity would be 8.6788%. c-2. If the debt-equity ratio were 1.0, the cost of equity would be 8.8894%. c-3. If the debt-equity ratio were zero, the cost of equity would be 5.8729%.
Explanation:
a. The formula to calculate the cost of equity capital is: Cost of Equity = WACC - (Debt/Equity) * (WACC - Cost of Debt) * (1 - Tax Rate). So, by plugging in the given values, we get Cost of Equity = 9.1% - 0.6 * (9.1% - 6.4%) * (1 - 0.22) = 9.1% - 0.6 * 2.7% * 0.78 = 9.1% - 0.4986% = 8.6014%.
b. The unlevered cost of equity capital can be calculated using the formula: Unlevered Cost of Equity = Cost of Equity / (1 + (Debt/Equity) * (1 - Tax Rate)). So, by plugging in the given values, we get Unlevered Cost of Equity = 8.6014% / (1 + 0.6 * 0.78) = 8.6014% / 1.468 = 5.8729%.
c-1. If the debt-equity ratio were 2, the new cost of equity can be calculated using the same formula as in part a. By plugging in the new debt-equity ratio, we get Cost of Equity = 9.1% - 2 * (9.1% - 6.4%) * (1 - 0.22) = 9.1% - 2 * 2.7% * 0.78 = 9.1% - 0.4212% = 8.6788%.
c-2. If the debt-equity ratio were 1.0, the new cost of equity can be calculated using the same formula as in part a. By plugging in the new debt-equity ratio, we get Cost of Equity = 9.1% - 1.0 * (9.1% - 6.4%) * (1 - 0.22) = 9.1% - 1.0 * 2.7% * 0.78 = 9.1% - 0.2106% = 8.8894%.
c-3. If the debt-equity ratio were zero (meaning no debt), the new cost of equity would be the same as the unlevered cost of equity calculated in part b, which is 5.8729%.
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Answers
Answer:
The Annual Operating Cash Flow is $1,029,811.43
Explanation:
Initial Investment = Cost of Machine + Modification Cost
Initial Investment = $2,575,000 + $375,000
Initial Investment = $2,950,000
Salvage Value = $0
Useful Life = 7 years
Depreciation per year = (Initial Investment - Salvage Value) / Useful Life
Depreciation per year = ($2,950,000 - $0) / 7
Depreciation per year = $421,428.57
Annual Operating Cash Flow = (Sales – Operating Costs) * (1 – Tax Rate) + Tax Rate * Depreciation
Annual Operating Cash Flow = ($1,890,000 - $454,600) * (1 - 0.40) + 0.40 * $421,428.571
Annual Operating Cash Flow = $1,435,400 * 0.60 + 0.40 * $421,428.571
Annual Operating Cash Flow = $1,029,811.4284
Annual Operating Cash Flow = $1,029,811.43
Final answer:
The annual operating cash flow for ABC after considering costs related to the machine investment, increased sales, and taxes, is $1,034,097.
Explanation:
To compute the annual operating cash flow, we first add up the total cost of the machine. This includes the purchase price of the machine which is $2,575,000, the cost of modifications which is $375,000, and the additional inventory investment of $75,000. This gives a total investment cost of $3,025,000. Given that this will be depreciated straight-line over 7 years with no salvage value, the annual depreciation expense will be $3,025,000 / 7 = $432,143.
The machine is expected to increase ABC's sales revenues by $1,890,000 per year, but will also increase operating costs excluding depreciation by $454,600. Therefore, the total annual income before tax would be the increased sales ($1,890,000) minus the increased costs ($454,600) and the depreciation ($432,143), which equals $1,003,257.
As ABC's tax rate is 40%, the annual tax payable will be: $1,003,257 * 0.4 = $401,303. The annual income after tax is then $1,003,257 - $401,303 = $601,954. Finally, we must remember to add back the depreciation (as it is a non-cash item) to get to EBIT. This gives us a final operating cash flow of $601,954 + $432,143 = $1,034,097.
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Answers
Answer:
Cost of Equity 8.794%
Explanation:
We can solve for the cost of equity using the CAPM
risk free 0.0291
premium market = market rate - risk free 0.071
beta(non diversifiable risk) 0.88
Ke 0.09158 = 9.158%
Or using the gordon dividend grow model
D= 3.57
return = ?
growth 0.0325
stock = 68.91
we solve for return:
return = 0,08430670 = 8.43%
Now we have two diferent rates, so we can do an average to get the best estimate cost of equity
(9.158 + 8.43)/2 = 8.794%
Final answer:
The company's cost of equity, based on provided data points and the Capital Asset Pricing Model (CAPM), is calculated to be 9.14% annually.
Explanation:
Cost of equity is typically estimated using the Capital Asset Pricing Model (CAPM). Under the CAPM, the cost of equity is a function of the risk-free interest rate, the equity's beta, and the expected market risk premium. In this case, we can substitue the given values into the CAPM equation, which is: Cost of Equity = Risk-free rate + Beta * Market Risk Premium. Therefore, the company's cost of equity can be calculated as: Cost of Equity = 2.91% + 0.88 * 7.10% = 9.14%. As for the dividends, they are growing at a rate of 3.25% annually, but they are not directly contributing to the company's cost of equity.
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