ZuoTi.Pro
Question

Multiplex Entertainment has 9 million shares outstanding, 250,000 shares of 6% preferred stock, and 105,000 semi-annual...

Multiplex Entertainment has 9 million shares outstanding, 250,000 shares of 6% preferred stock, and 105,000 semi-annual bonds at 7.5% (with par value of $1000 each). Common stock sells at $34/share (beta 1.25), preferred stock at $91/share, and the bonds at 93% of par with 15 years to maturity. The market risk premium is 8.5%, T-Bills are yielding 5%, and the corporate tax rate is 35%. What is the Multiplex Entertainment’s WACC?

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Ke 100 Preference Face value preference dividend Market price Cost of preference shares Rf+Beta*(Rm-Rf) 0.05+1.25*(0.085) 0.1

0 0
Add a comment
Know the answer?
Add Answer to:
Multiplex Entertainment has 9 million shares outstanding, 250,000 shares of 6% preferred stock, and 105,000 semi-annual...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Finding the WACC [LO3] Titan Mining Corporation has 9 million shares of common stock outstanding, 250,000...

    Finding the WACC [LO3] Titan Mining Corporation has 9 million shares of common stock outstanding, 250,000 shares of 6 percent preferred stock outstanding, and 105,000 7.5 percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $34 per share and has a beta of 1.25, the preferred stock currently sells for $91 per share, and the bonds have 15 years to maturity and sell for 93 percent of par. The market risk premium is 8.5 percent,...

  • #16 a Finding the WACC Adex Mining Corporation has 9 million shares of common stock outstanding,...

    #16 a Finding the WACC Adex Mining Corporation has 9 million shares of common stock outstanding, 250,000 shares of 6 percent preferred stock outstanding, and 105,000 7.5 percent semi-annual bonds outstanding, par value $1,000 each. The common stock currently sells for $34 per share and has a beta of 1.25, the preferred stock currently sells for $91 per share, and the bonds have 15 years to maturity and sell for 93 percent of par. The market risk premium is 8.5...

  • What is the firms market capital structure and WACC? Titan Mining Corporation has 8.5 million shares...

    What is the firms market capital structure and WACC? Titan Mining Corporation has 8.5 million shares of common stock outstanding, 250,000 shares of 5 percent preferred stock outstanding, and 135,000 7.5 percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $34 per share and has a beta of 1.25, the preferred stock currently sells for $91 per share, and the bonds have 15 years to maturity and sell for 114 percent of par. The market...

  • Raymond Mining Corporation has 8.5 million shares of common stock outstanding and 135,000 semi-annual bonds outstanding...

    Raymond Mining Corporation has 8.5 million shares of common stock outstanding and 135,000 semi-annual bonds outstanding with face value $1000 and coupon rate of 7.5%. The common stock currently sells for $34 per share and has a beta of 1.25, and the bonds have 15 years to maturity and sell for 114 percent of the face value ($114 per $100 of face value). The market risk premium is 7.5 percent, T-bills are yielding 4 percent (thus risk free rate is...

  • Finding the WACC [LO3] Titan Mining Corporation has 7.5 million shares of common stock outstanding, 250,000...

    Finding the WACC [LO3] Titan Mining Corporation has 7.5 million shares of common stock outstanding, 250,000 shares of 4.2 percent preferred stock outstand- ing, and 140,000 bonds with a semiannual coupon of 5.1 percent outstanding, par value $1,000 each. The common stock currently sells for $51 per share and has a beta of 1.15, the preferred stock currently sells for $103 per share, and the bonds have 15 years to maturity and sell for 107 percent of par. The market...

  • 1. Organic Produce Corporation has 7.5 million shares of common stock outstanding, 500,000 shares of 7%...

    1. Organic Produce Corporation has 7.5 million shares of common stock outstanding, 500,000 shares of 7% preferred stock outstanding, and 175,000 of 8.2% semiannual bonds outstanding, par value of $1,000 each. The common stock currently sells for $64 per share and has a beta of 1.2, the preferred stock currently sells for $108 per share, and the bonds have 15 years to maturity and sell for 96% of par. The market risk premium is 6.8%, T-Bills are yielding 5.5%, and...

  • Question # 20 - Raymond Mining Corporation has 8.7 million shares of common stock outstanding, 310,000...

    Question # 20 - Raymond Mining Corporation has 8.7 million shares of common stock outstanding, 310,000 shares of 6% $100 par value preferred stock outstanding, and 147,000 7.50% semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $35 per share and has a beta of 1.35, the preferred stock currently sells for $91 per share, and the bonds have 20 years to maturity and sell for 116% of par. The market risk premium is 7.5%, T-bills...

  • Burwood Investment Limited has: ---8 million shares of common stock outstanding, the price is $32 and...

    Burwood Investment Limited has: ---8 million shares of common stock outstanding, the price is $32 and beta is 1.15. Market risk premium is 10%, T-bills are yielding 5%. ---0.5 million shares of 6% preferred stock outstanding, the price is $67. ---100,000 of 9% semi-annual bonds outstanding, 15 years to maturity, and sell for 91% of par. The current yield to maturity on these bonds is 10.18%p.a. a) If the applicable tax rate is 35% p.a. what is the capital structure...

  • Hilton Corporation has 1 million shares of common stock outstanding and 175,000 bonds with 6% coupon...

    Hilton Corporation has 1 million shares of common stock outstanding and 175,000 bonds with 6% coupon at $1000 par each. The stock currently sells at $53 per share and has a beta of 1.15; the bonds have 25 years to maturity and sell at $1141. The market risk premium is 6.8% and Treasury bills are yielding 3.1%. If Hilton’s corporate tax rate is 21%, what is the company’s cost of capital (WACC)?

  • Burwood Investment Limited has: 1) 8 million shares of common stock outstanding, the price is $32...

    Burwood Investment Limited has: 1) 8 million shares of common stock outstanding, the price is $32 and beta is 1.15. Market risk premium is 10%, T-bills are yielding 5%. 2) 0.5 million shares of 6% preferred stock outstanding, the price is $67. 3) 100,000 of 9% semi-annual bonds outstanding, 15 years to maturity, and sell for 91% of par. The current yield to maturity on these bonds is 10.18%p.a. a) If the applicable tax rate is 35% p.a. what is...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT