Reduce to the lowest terms: (5x^3) / (10x^7)
(5x^3) / (10x^7) = (5x^3) / (5 * 2* x^3 * x^4) = 1 / (2x^4) The lowest term is 1/(2x^4) found by canceling
Why is the Weighted Average Cost of Capital (WACC) the right discount rate for valuing a firm?
This rate, calculated as WACC = (D/V) * Rd (1-t) + (E/V)* Re, takes into account the % return investors require based on total debt and equity and the cost a firm incurs. In return the WACC represents the required rate of return given the average risk of all future cast flows.
What is the value of (a^2 + x)/y when a = 4, x = 6 and y = 2?