Total value=(23625+4350+52275)=$80250
WACC=Respective costs*Respective weight
=(23625/80250*12)+(4350/80250*15)+(52275/80250*20.3)
=17.57%(Approx).
Problem 13-2 The Aztec Corporation has the following capital components and costs. Calculate Aztec's WACC. Round...
The Aztec Corporation has the following market capital components and costs. Calculate Aztec's WACC. Component Value Cost Debt $ 23,625 12.0% 13.5% Preferred Stock Common Equity $ 4,350 $ 52,275 19.2% Aztec has a 35% marginal tax rate.
Calcul The Aztec Corporation has the following market capital components and costs. Calculate Aztec's WACC Component Value Cost Debt $ 23,625 Preferred Stock $ 4,350 13.5% Common Equity S 52,275 19.2% eot S Aztec has a 35% marginal tax rate
Problem 10-8 Cost of Common Equity and WACC Palencia Paints Corporation has a target capital structure of 25% debt and 75% common equity, with no preferred stock. Its before-tax cost of debt is 10% and its marginal tax rate is 40%. The current stock price is Po = $22.00. The last dividend was Do = $2.25, and it is expected to grow at a 7% constant rate. What is its cost of common equity and its WACC? Round your answers...
Problem 10-8 Cost of Common Equity and WACC Palencia Paints Corporation has a target capital structure of 25% debt and 75% common equity, with no preferred stock. Its before-tax cost of debt is 10% and its marginal tax rate is 40%. The current stock price is Po = $27.50. The last dividend was Do = $2.25, and it is expected to grow at a 6% constant rate. What is its cost of common equity and its WACC? Round your answers...
Problem 14-9 Calculating WACC (LO3] Targaryen Corporation has a target capital structure of 60 percent common stock, 5 percent preferred stock, and 35 percent debt. Its cost of equity is 9 percent, the cost of preferred stock is 4 percent, and the pretax cost of debt is 5 percent. The relevant tax rate is 21 percent. a. What is the company's WACC? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g.,...
Problem 10-8 Cost of Common Equity and WACC Palencia Paints Corporation has a target capital structure of 40% debt and 60% common equity, with no preferred stock. Its before-tax cost of debt is 11% and its marginal tax rate is 40%. The current stock price is Po = $20.00. The last dividend was Do = $3.00, and it is expected to grow at a 5% constant rate. What is its cost of common equity and its WACC? Round your answers...
Cost of Common Equity and WACC Palencia Paints Corporation has a target capital structure of 45% debt and 55% common equity, with no preferred stock. Its before-tax cost of debt is 13% and its marginal tax rate is 40%. The current stock price is P0 = $33.50. The last dividend was D0 = $2.50, and it is expected to grow at a 7% constant rate. What is its cost of common equity and its WACC? Round your answers to two...
COST OF COMMON EQUITY AND WACC Palencia Paints Corporation has a target capital structure of 30% debt and 70% common equity, with no preferred stock. Its before-tax cost of debt is 13% and its marginal tax rate is 40%. The current stock price is Po-$31.50. The last dividend was D0 = $2.25, and it is expected to grow at a 4% constant rate. What is its cost of common equity and its WACC? Round your answers to two decimal places....
WACC AND OPTIMAL CAPITAL BUDGET Adamson Corporation is considering four average-risk projects with the following costs and rates of return: Project Cost Expected Rate of Return 1 $2,000 16.00% 2 3,000 15.00 3 5,000 13.75 4 2,000 12.50 The company estimates that it can issue debt at a rate of rd = 10%, and its tax rate is 30%. It can issue preferred stock that pays a constant dividend of $5 per year at $54 per share. Also, its common...
WACC and optimal capital budget Adamson Corporation is considering four average-risk projects with the following costs and rates of return: Project Cost Expected Rate of Return 1 $2,000 16.00% 2 3,000 15.00 3 5,000 13.75 4 2,000 12.50 The company estimates that it can issue debt at a rate of rd = 11%, and its tax rate is 40%. It can issue preferred stock that pays a constant dividend of $5 per year at $43 per share. Also, its common...