Homework Answers
Weight of Long-term Debt = 30%
After-tax Cost of Long-term Debt = 4.00%
Weight of Preferred Stock = 10%
Cost of Preferred Stock = 10.00%
Weight of Common Stock = 60%
Cost of Common Stock = 16.00%
WACC = Weight of Long-term Debt * After-tax Cost of Long-term
Debt + Weight of Preferred Stock * Cost of Preferred Stock + Weight
of Common Stock * Cost of Common Stock
WACC = 0.30 * 4.00% + 0.10 * 10.00% + 0.60 * 16.00%
WACC = 1.20% + 1.00% + 9.60%
WACC = 11.80%
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A firm has determined its target capital structure and it after-tax cost for each source of...
A firm has determined its target capital structure and it after-tax cost for each source of...
A firm has determined its target capital structure and it after-tax cost for each source of capital. What is the firm's weighted average cost of capital (WACC)? (Enter your answers as a percentge rounded to 2 decimal places) Cost Proportion 30% Source of Capital Long-term Debt (after taxes) Preferred Stock Common Stock 6096 Your Answer: Answer
Question 6 (1 point) A firm has determined its target capital structure and it after-tax cost...
Question 6 (1 point) A firm has determined its target capital structure and it after-tax cost for each source of capital. What is the firm's weighted average cost of capital (WACC) (Enter your answers as a percentge rounded to 2 decimal places) Proportion 30% Cost 38 Source of Capital Long-term Debt (after taxes) Preferred Stock Common Stock 109 60% Your Answer: Answer
Question 7 (1 point) A firm has determined its target capital structure and it after-tax cost...
Question 7 (1 point) A firm has determined its target capital structure and it after-tax cost for each source of capital. What is the firm's weighted average cost of capital (WACC)? (Enter your answers as a percentge rounded to 2 decimal places) Source of Capital Proportion Cost Long-term Debt (after taxes) 30% 3% Preferred Stock 10% 9% Common Stock 60% 14% Your Answer: Answer Page 2 of 3 Next Page
A firm has determined its cost of each source of capital and optimal capital structure which...
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A firm has determined its optimal capital structure which is composed of the following sources and...
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The Cost of Capital: Weighted Average Cost of Capital The firm's target capital structure is the...
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After careful analysis, Dexter Brothers has determined that its optimal capital structure is composed of the...
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optimal capital structure is composed of the sources and target
market value weights shown in the following table:
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stock is estimated to be 9.5%;the cost of retained earnings is
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Determining the Cost of Capital: Weighted Average Cost of Capital The firm's target capital structure is...
Determining the Cost of Capital: Weighted Average Cost of Capital The firm's target capital structure is the mix of debt, preferred stock, and common equity the firm plans to raise funds for its future projects. The target proportions of debt, preferred stock, and common equity, along with the cost of these components, are used to calculate the firm's weighted average cost of capital (WACC). If the firm will not have to issue new common stock, then the cost of retained...
A firm has determined its target capital structure and it after-tax cost for each source of capital. What is the firm's weighted average cost of capital (WACC)? (Enter your answers as a percentge rounded to 2 decimal places) Cost Proportion 30% Source of Capital Long-term Debt (after taxes) Preferred Stock Common Stock 6096 Your Answer: Answer
Question 6 (1 point) A firm has determined its target capital structure and it after-tax cost for each source of capital. What is the firm's weighted average cost of capital (WACC) (Enter your answers as a percentge rounded to 2 decimal places) Proportion 30% Cost 38 Source of Capital Long-term Debt (after taxes) Preferred Stock Common Stock 109 60% Your Answer: Answer
Question 7 (1 point) A firm has determined its target capital structure and it after-tax cost for each source of capital. What is the firm's weighted average cost of capital (WACC)? (Enter your answers as a percentge rounded to 2 decimal places) Source of Capital Proportion Cost Long-term Debt (after taxes) 30% 3% Preferred Stock 10% 9% Common Stock 60% 14% Your Answer: Answer Page 2 of 3 Next Page
Determining the cost of Capital: Weighted Average Cost of Capital The firm's target capital structure is the mix of debt, preferred stock, and common equity the firm plans to raise funds for its future projects. The target proportions of debt, preferred stock, and common equity, along with the cost of these components, are used to calculate the firm's weighted average cost of capital (WACC). If the firm will not have to issue new common stock, then the cost of retained...
A firm has determined its optimal capital structure which is composed of the following sources and target market value proportions. Additionally, the firm's marginal tax rate is 40 percent Source of Capital Long-term debt Preferred stock Common stock equity Market Proportions 20% 10 70 Debt: The firm can sell a 12-year, $1,000 par value, 7 percent annual bond for $880. Preferred Stock: The firm has determined it can issue preferred stock at $75 per share par value. The stock will...
The Cost of Capital: Weighted Average Cost of Capital The firm's target capital structure is the mix of debt, preferred stock, and common equity the firm plans to raise funds for its future projects. The target proportions of debt, preferred stock, and common equity, along with the cost of these components, are used to calculate the firm's weighted average cost of capital (WACC). If the firm will not have to issue new common stock, then the cost of retained earnings...
After careful analysis, Dexter Brothers has determined that its
optimal capital structure is composed of the sources and target
market value weights shown in the following table:
The cost of debt is estimated to be 4.1% the cost of preferred
stock is estimated to be 9.5%;the cost of retained earnings is
estimated to be13%; and the cost of new common stock is estimated
to be 15% All of these are after-tax rates. The company's debt
represents 22%,
the preferred stock...
Determining the Cost of Capital: Weighted Average Cost of Capital The firm's target capital structure is the mix of debt, preferred stock, and common equity the firm plans to raise funds for its future projects. The target proportions of debt, preferred stock, and common equity, along with the cost of these components, are used to calculate the firm's weighted average cost of capital (WACC). If the firm will not have to issue new common stock, then the cost of retained...
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