WEIGHTED AVERAGE COST OF CAPITAL
=40%*14%+10%*12%+50%*8%*(1-40%)
=9.20%
the above is answer
Save Awe 5 points COB has the following pre-tax component costs of capital: Debt-8%, common stock...
Target % in Capital Structure Component Cost (pre-tax) Component Cost (after-tax) Weighted Component Cost Debt 35.00% Preferred Stock 2.00% Equity 63.00% Tax Rate = 35.00% WACC = Outstanding Bond Preferred Stock Info Common Stock Info (Annual Coupons) Preferred Divided 3 Current Dividend $2.00 Time to Maturity (years) 10 Current Market Price 50 Current Price $81.00 Coupon Rate APR 6.00% Preferred Yield 6.00% Expected Growth in Dividends 3.00% Face Value $1,000.00 Expected Return on Equity 5.54% Current Market Price $975.00 YTM...
Theodore Inc, has a capital structure made up of 50% in common
equity, 40% in debt and 10% in preferred equity
Theodore Inc. has a capital structure made up of 50% in common equity, 40% in debt and 10% in preferred equity. The cost of common equity is 20%, the cost of preferred equity is 13%, and the pre-tax cost of debt is 8%. What is the weighted average cost of capital for Theodore Inc.? Assume a marginal tax rate...
Stag corp has a capital structure which is based on 50% common stock, 20% preferred stock and 30% debt. The cost of common stock is 14%, the cost of preferred stock is 8% and the pre-tax cost of debt is 10%. The firm's tax rate is 40%. (1 mark) a. Calculate the WACC of the firm. b. The firm is considering a project that is equally as risky as the firm's current operations. This project has initial costs of $280,000...
QUESTION 4: A firm has a capital structure containing 40 percent debt, 10 percent preferred stock, and 50 percent common stock equity. The firm's debt has a yield to maturity of 9.50 percent. Its preferred stock's annual dividend is $7.50 and the preferred stock's current market price is $50.00 per share. The firm's common stock has a beta of 0.90 and the risk-free rate and the market return are currently 4.0 percent and 13.5 percent, respectively. The firm is subject...
Target % in Capital Structure Component Cost (pre-tax) Component Cost (after-tax) Weighted Component Cost Debt 25.00% Preferred Stock 8.00% Equity 67.00% Tax Rate = 35.00% WACC = Outstanding Bond Preferred Stock Info Common Stock Info (Annual Coupons) Preferred Divided 2 Current Dividend $3.00 Time to Maturity (years) 10 Current Market Price 45 Current Price $81.00 Coupon Rate APR 6.00% Preferred Yield 4.44% Expected Growth in Dividends 3.00% Face Value $1,000.00 Expected Return on Equity 6.81% Current Market Price $1,000.00 YTM...
7. A company has a before-tax cost of common equity of 14%, pre-tax cost of debt of 6%, a cost of preferred equity of 8%, and a marginal tax rate of 34%. The current market value of the company is $150 million, with $75 million common equity, $50 million debt, and $25 million preferred equity.
Miller Manufacturing has a capital structure of 50% common stock, 5% preferred stock, and 45% debt. It just issued a dividend of $1.22 per share on its common stock. Dividends are expected to grow at a constant rate of 5%. Current common stock price is $45. Cost of preferred stock is 7.5% and before tax cost of debt is 7.5%. Tax rate for this firm is 21%. What is the WACC for this firm?
Given the following information: 50% debt 5% preferred stock 55% common equity 6% after-tax cost of debt 10% cost of preferred stock 13.5% cost of common equity What is the weighted average cost of capital, rounded to the nearest whole number? - 13% - 8% - 11% - 0%
Given the following information. Percent of capital structure: Debt 20 % Preferred stock 30 Common equity 50 Additional information: Corporate tax rate 40 % Dividend, preferred $8.00 Dividend, expected common $3.50 Price, preferred $103.00 Corporate growth rate 8 % Bond yield 9 % Flotation cost, preferred $7.20 Price, common $78.00 Calculate the weighted average cost of capital for Hadley Corporation. Line up the calculations in the order shown in Table 11–1. (Round intermediate calculations to 2 decimal places. Round the...
Given the following information: Percent of capital structure: Debt 40 % Preferred stock 20% Common equity 40 % Additional information: Bond coupon rate 8% Bond yield to maturity 6% Dividend, expected common $ 4.00 Dividend, preferred $ 11.00 Price, common $ 55.00 Price, preferred $ 134.00 Flotation cost, preferred $ 8.20 Growth rate 9% Corporate tax rate 30% Calculate the Hamilton Corp.'s weighted cost of each source of capital and the weighted average cost of capital Debt- Preferred Stock- Common...