Only one question can be answered as per guidelines. Kindly ask separately.
Weighted average cost of capital takes into account the weights of debt and equity in ghe capital structure and their corresponding cost to calculate the wacc.
Total market value of firm = market value of debt + market value of equity
925 mil = 425 mil + market value of equity
Thus, market value of equity = $500 million.
% of debt in capital = 425/925
% of equity in capital = 500/925
Wacc = %debt*(1-tax)*(cost of debt) + (%equity)*(cost of equity)
Wacc = (425/925)*(1-0.35)*(10%) + (500/925)*(17%)
Wacc = 12.1757%
Thus, option B is correct. 12.18%.
help with 3,9,10 please The market value of debt is $425 million and the total market...
The market value of debt is $425 million and the total market value of the firm is 5925 million. The cost of cquity is 17%, the cost of debt is 10% and the corporate tax rate is 35%. What is the WACC? O A 11.01% OB 12.189 C. 13.78% OD 14.17% E none
Suppose the nominal risk-free rate of interest in US is 3%, and that of Canada is 2%. The inflation rate in US is 5%, what is the inflation rate in Canada? A. 1% OB.-1% C.2% D.4% - E none QUESTION 10 Estimate the exchange rate in the next two years, if US inflation rate is 5%, and that of Canada is 4%. The current spot rate is $10585 Tip Use the "Amoateng Gut Check' to forecast this exchange rate O...
Estimate the exchange rate in the next two years, if US inflation rate is 5%, and that of Canada is 4%. The current spot rate is $1.0585 Tipo Use the "Amoateng Gut-Check" to forecast this exchange rate O A $10790 OB $10790 C.$1.0384 D. $1.0384 E none
7,8 If last year's Euro US$ rate was 0 6780 and the current rate is 07455, what is the change in currency (appreciation or depreciation) OA-6.70% OB 6.70% OC-9.49% D 9.49% O E none QUESTION 8 ITUS T-bil rate is currently at 5% and that of Mexico is 8%, what will be the exchange rate five years from now if the spot exchange rate is 50 20 per peso? Tip Use the "Amoatong Gut-Check" to forecast O A $0 2303...
A firm has a total market value of $10 million while its debt has a market value of $4 million. What is the after-tax weighted average cost of capital if the before-tax cost of debt is 10 percent, the cost of equity is 15 percent, and the tax rate is 21 percent? (Round to the nearest decimal place). Multiple Choice 13.0 percent 12.2 percent 8.8 percent 10.4 percent
Assume JUP has debt with a book value of $15 million, trading at 120% of par value. The bonds have a yield to maturity of 8%. The firm has book equity of $20 million, and 2 million shares trading at $20 per share. The firm's cost of equity is 12%. What is JUP's WACC if the firm's marginal tax rate is 30%? O A. 10.51% OB. 11.02% O C. 8.01% OD. 10.01%
The market value of Fords' equity, preferred stock and debt are 57 billion, $5 billion and $11 billion respectively. Ford has a beta of 1.5, the market risk premium is 8% and the risk-free rate of interest is 3%. Ford's preferred stock pays a dividend of S4 each year and trades at a price of $25 per share. Ford's debt trades with a yield to maturity of 10%. What is Ford's weighted average cost of capital if its tax rate...
US Steel has $3.16 billion in total debt (which approximates its market value). Interest expense for the year was about $214.0 million. The company’s market capitalization is approximately $1.17 billion, its market beta is 2.65, and its assumed tax rate is 37%. Assume that the risk-free rate equals 2.5% and the market premium equals 5%. US Steel’s cost of equity capital A) 15.75% B) 9.13% C) 13.25% D) 14.13%
Zagrot Trucking’s balance sheet shows a total of noncallable $45 million long-term debt with a coupon rate of 8.00% and a yield to maturity of 6.00%. This debt currently has a market value of $100 million. The balance sheet also shows that the company has 20 million shares of common stock, and the book value of the common equity (common stock plus retained earnings) is $650 million. The current stock price is $100 per share; stockholders' required return, rs, is...
Please help me with my Economics Homework? 1. For each of the following situations, identify the full cost (opportunity cost) involved Monique quits her $75,000 per-year job as an accountant to become a full-time volunteer at a women's shelter O A. O B. O C. The opportunity cost of volunteering at the shelter is the wages she gave up The opportunity cost of Monique's decision is the value of the next-best alternative not chosen. The opportunity cost of Monique's decision...