Charlotte's Crochet Shoppe has 16,100 shares of common stock outstanding at a price per share of...
Charlotte's Crochet Shoppe has 16,100 shares of common stock outstanding at a price per share of $81 and a rate of return of 11.85 percent. The company also has 340 bonds outstanding, with a par value of $2,000 per bond. The pretax cost of debt is 6.25 percent and the bonds sell for 99 percent of par. What is the firm's WACC if the tax rate is 35 percent?
Homework Answers
Market value of shares = 16100*81 = 1304100
Market value of bonds = 340*2000*99% = 673200
Total value = 1977300
Cost of equity = 11.85%
Cost of bonds: 6.25%*(1-0.35) = 4.0625%
WACC = 11.85%*1304100/1977300 + 4.0625%*673200/1977300
=9.2%
Add Answer to:
Charlotte's Crochet Shoppe has 16,100 shares of common stock
outstanding at a price per share of...
Charlotte's Crochet Shoppe has 17,300 shares of common stock outstanding at a price per share of...
Charlotte's Crochet Shoppe has 17,300 shares of common stock
outstanding at a price per share of $85 and a rate of return of
12.01 percent. The company also has 380 bonds outstanding, with a
par value of $2,000 per bond. The pretax cost of debt is 6.33
percent and the bonds sell for 100.2 percent of par. What is the
firm's WACC if the tax rate is 40 percent?
Check my work Charlotte's Crochet Shoppe has 17,300 shares of common...
Charlotte's Crochet Shoppe has 17,000 shares of common stock outstanding at a price per share of...
Charlotte's Crochet Shoppe has 17,000 shares of common stock outstanding at a price per share of $84 and a rate of return of 11.97 percent. The company also has 370 bonds outstanding, with a par value of $2,000 per bond. The pretax cost of debt is 6.31 percent and the bonds sell for 99.9 percent of par. What is the firm's WACC if the tax rate is 35 percent?
Charlotte's Crochet Shoppe has 15,800 shares of common stock outstanding at a price per share of...
Charlotte's Crochet Shoppe has 15,800 shares of common stock outstanding at a price per share of $80 and a rate of return of 11.81 percent. The company also has 330 bonds outstanding, with a par value of $2,000 per bond. The pretax cost of debt is 6.23 percent and the bonds sell for 98.7 percent of par. What is the firm's WACC if the tax rate is 40 percent? Multiple Choice 8.59% 10.34% 9.06% 9.91% 8.75%
Charlotte's Crochet Shoppe has 13,100 shares of common stock outstanding at a price per share of...
Charlotte's Crochet Shoppe has 13,100 shares of common stock outstanding at a price per share of $71 and a rate of return of 11.45 percent. The company also has 400 bonds outstanding, with a par value of $1,000 per bond. The pretax cost of debt is 6.05 percent and the bonds sell for 96 percent of par. What is the firm's WACC if the tax rate is 39 percent?
Kim's Bridal Shoppe has 11,500 shares of common stock outstanding at a price of $49 per...
Kim's Bridal Shoppe has 11,500 shares of common stock outstanding at a price of $49 per share. It also has 280 shares of preferred stock outstanding at a price of $91 per share. There are 310 bonds outstanding that have a coupon rate of 6.8 percent paid semiannually. The bonds mature in 30 years, have a face value of $2,000, and sell at 108.5 percent of par. What is the capital structure weight of the common stock?
7 Kim's Fur Shoppe has 11,200 shares of common stock outstanding at a price of $46 per...
7 Kim's Fur Shoppe has 11,200 shares of common stock outstanding at a price of $46 per share. It also has 265 shares of preferred stock outstanding at a price of $88 per share. There are 620 bonds outstanding that have a coupon rate of 6.5 percent paid semiannually. The bonds mature in 27 years, have a face value of $1,000, and sell at 107 percent of par. What is the capital structure weight (WE) of the common stock? A 0.5018 B 0.447 C 0.4286 D 0.3256
Filer Manufacturing has 5 million shares of common stock outstanding. The current share price is $77,...
Filer Manufacturing has 5 million shares of common stock outstanding. The current share price is $77, and the book value per share is $8. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value $60 million, has a coupon of 6 percent, and sells for 97 percent of par. The second issue has a face value of $30 million, has a coupon of 7 percent, and sells for 105 percent of par. The first...
Dinklage Corp. has 8 million shares of common stock outstanding. The current share price is $74,...
Dinklage Corp. has 8 million shares of common stock outstanding. The current share price is $74, and the book value per share is $5. The company also has two bond issues outstanding. The first bond issue has a face value of $80 million, has a 9 percent coupon, and sells for 95 percent of par. The second issue has a face value of $60 million, has a 10 percent coupon, and sells for 108 percent of par. The first issue...
Dinklage Corp. has 9 million shares of common stock outstanding. The current share price is $81, and the book value per share is $8. The company also has two bond issues outstanding. The first bond issue has a face value of $80 million, has a 10 percent c
Dinklage Corp. has 9 million shares of common stock outstanding. The current share price is $81, and the book value per share is $8. The company also has two bond issues outstanding. The first bond issue has a face value of $80 million, has a 10 percent coupon, and sells for 96 percent of par. The second issue has a face value of $50 million, has a 11 percent coupon, and sells for 104 percent of par. The first issue...
Masterson, Inc., has 9 million shares of common stock outstanding. The current share price is $81, and the book value p...
Masterson, Inc., has 9 million shares of common stock outstanding. The current share price is $81, and the book value per share is $7. The company also has two bond issues outstanding. The first bond issue has a face value of $130 million, has a coupon rate of 6 percent, and sells for 92 percent of par. The second issue has a face value of $115 million, has a coupon rate of 5 percent, and sells for 103 percent of...
Charlotte's Crochet Shoppe has 17,300 shares of common stock
outstanding at a price per share of $85 and a rate of return of
12.01 percent. The company also has 380 bonds outstanding, with a
par value of $2,000 per bond. The pretax cost of debt is 6.33
percent and the bonds sell for 100.2 percent of par. What is the
firm's WACC if the tax rate is 40 percent?
Check my work Charlotte's Crochet Shoppe has 17,300 shares of common...
Charlotte's Crochet Shoppe has 17,000 shares of common stock outstanding at a price per share of $84 and a rate of return of 11.97 percent. The company also has 370 bonds outstanding, with a par value of $2,000 per bond. The pretax cost of debt is 6.31 percent and the bonds sell for 99.9 percent of par. What is the firm's WACC if the tax rate is 35 percent?
Masterson, Inc., has 9 million shares of common stock outstanding. The current share price is $81, and the book value per share is $7. The company also has two bond issues outstanding. The first bond issue has a face value of $130 million, has a coupon rate of 6 percent, and sells for 92 percent of par. The second issue has a face value of $115 million, has a coupon rate of 5 percent, and sells for 103 percent of...
Most questions answered within 3 hours.
-
Which statement is always true: The total energy of a closed
system...
A) is always equally...
asked 41 seconds from now -
find the critical value associated with a right sided hypothesis of
the mean using a sample...
asked 1 hour ago -
Which of the following statements is true with respect to a
simple linear regression model?
a....
asked 2 hours ago -
The energy required to remove an electron from a surface of a
solid element is called...
asked 4 hours ago -
How would you train your employees to avoid risks of using
mobile devices?
asked 4 hours ago -
Assume Kw = 1.01 ✕ 10−14
For pure water, we can calculate [H3O+ ] = [OH...
asked 5 hours ago -
Suppose that on a temperature scale X, water boils at 203.0°X
and freezes at -105.7°X. What...
asked 6 hours ago -
BaS crystallizes in a cubic unit cell with S2- ions on each
corner and each face....
asked 6 hours ago -
A. 0≤P(Oi)≤10≤P(Oi)≤1 for each i
B. P(Oi)≤0P(Oi)≤0
C. P(Oi)=1+P(OCi)P(Oi)=1+P(OiC)
D. P(Oi)≥1P(Oi)≥1
If an experiment consists of...
asked 8 hours ago -
A battery has an emf of 9.20V and an internal resistance of 1.20
ohm. a)What resistance...
asked 8 hours ago -
The area of an elastic circular loop decreases at a constant
rate, dA/dt = −6.60×10−3 m2/s...
asked 9 hours ago -
The denaturation of proteins can be described by the
equilibrium
F⇌U
where F and U represent...
asked 10 hours ago