Qantas Is Discussing New Ways to Recapitalise the Firm and Raise

question 76

Multiple Choice

Qantas is discussing new ways to recapitalise the firm and raise additional capital. Its current capital structure has a 10% weight in ordinary shares, 20% in preference shares, and 70% in debt. The cost of equity capital is 15%, the cost of preference shares is 10%, and the pretax cost of debt is 8%. What is the weighted average cost of capital for Qantas if its marginal tax rate is 30%?

• A) 7.98%
• B) 7.42%
• C) 8.01%
• D) 7.01%

Understand the structure, function, and importance of inner ear components in hearing and balance.

Understand the concept of price discrimination and its types (first-degree, second-degree, third-degree).

Identify the conditions under which firms engage in different types of price discrimination.

Distinguish between the impacts of various forms of price discrimination on market efficiency.

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Definitions:

Units-Of-Activity

A depreciation method that allocates the cost of an asset over its useful life based on its usage or activity levels, rather than time.

Depreciation Expense

Depreciation expense is the allocated portion of the cost of a tangible asset that is expensed over its useful life, reflecting wear and tear, obsolescence, or loss of value.

Double-Declining-Balance

A method of accelerated depreciation which doubles the normal depreciation rate, reducing the value of an asset more quickly in its early years.

Accelerated Depreciation

A depreciation method that allows faster write-off of assets in the initial years of asset life.