BUSINESS FINANCE GEOMETRIC AVERAGE

Business & Finance
Tutor: None Selected Time limit: 1 Day

What is the arithmetic average of 12%, 14%, -20% (that’s negative 20) and 10%?  What is the geometric average? 

May 3rd, 2015

arithmetic average would be the sum of the numbers divided by 4 (the number of items): 

(0.12+0.14+(-0.2)+0.1)/4 = 0.16/4 = 0.04 or 4%

geometric mean would be the 4th rood of the product of the numbers: 4t root (0.12 x 0.14 x (-0.2) x 0.1), however, we can't take the 4th root of a negative number.  So the geometric mean is not real.
May 3rd, 2015

I am in a test at this moment and wondered if you could answer one more question question for me

May 3rd, 2015

Use the following data for securities issued by Vandelay Industries to answer questions 1 - 5:  Bonds: The company issued 240,000 bonds.  The bonds have a $1,000 face value with 7.5% coupons with annual payments, 20 years to maturity, and currently sell for $940.  The marginal tax rate is 40%.  Equity: The company has 9,000,000 shares of (common) stock outstanding, selling for $71 per share.  The company’s beta is 1.2, the risk free rate is 1%, and the market risk premium is 10%.

What is the total market value, the percent of the company's financing debt, the percent of the company's financing equity, after-tax cost of debt, cost of equity, and weighted average cost of capital?



May 3rd, 2015

I'm in the middle of something else right now.  I'll get back to you as soon as I can.


May 3rd, 2015

I am sorry, this is out of my expertise.

May 3rd, 2015

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