Homework Answers
| Capitals | Market Value | Weight to total market value [Market value / Total market value] | Cost of capital | WACC |
| Debt | 2,575,000 | 0.1212 |
4.15% [5.25% x (1 - 0.21)] |
0.50% |
| Preferred Stock | 550,000 | 0.0259 | 6.35% | 0.17% |
| Common Stock | 18,125,000 | 0.8529 | 14.05% | 11.98% |
| Total | 21,250,000 | 12.65% | ||
Hence, the Weightd average cost of capital (WACC) is 12.65%
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Doll + 8) + Question is of 30 Question 15 Spoints Metals Corp. has $2,575,000 of...
14) Metals Corp. has $2,575,000 of debt, the market value of preferred stock is $1,550,000 and...
14) Metals Corp. has $2,575,000 of debt, the market value of preferred stock is $1,550,000 and of common stock is $18,125,000. Metals Corp.'s after-tax cost of debt is 5.25%, preferred stock has a cost of 6.35%, and newly issued common stock has a cost of 14.05%. What is Metals Corp.'s weighted average cost of capital? Ob) 10.8% O c) 8.3% od) 12.5% a) 12.8%
Equity Lightning Corp. wishes to explore the effect on its cost of capital of the rate...
Equity Lightning Corp. wishes to explore the effect on its cost of capital of the rate at which the company pays taxes. The firm wishes to maintain a capital structure of 30% debt, 10% preferred stock, and 60% common stock. The cost of financing using retained earnings is 14%, the cost of preferred stock financing is 9%, and the before-tax cost of debt financing is 11%. Calculate the weighted average cost of capital (WACC) given the following tax rate assumptions:...
ABC Corp has a target capital structure of 30% Debt, 20% Preferred Equity and 50% Common Stock. (1) ABC Corp had a 4.5%...
ABC Corp has a target capital structure of 30% Debt, 20% Preferred Equity and 50% Common Stock. (1) ABC Corp had a 4.5% after tax cost of debt. (2) ABC Corp has a 5% Cost of preferred equity (3) ABC Corp has a 8% cost of Common equity. Calculate ABC Corps WACC.?
Question 3 WACC)orelkely be y. ABC Co. has a capital structure which is based on 30%...
Question 3 WACC)orelkely be y. ABC Co. has a capital structure which is based on 30% debt, 10% preferred stock, and 60% common stock. The pre-tax cost of debt is 8%, the cost of preferred stock is 9%, and the cost of common stock is 11%. The company's tax rate is 34%. What is ABC's weighted average cost of capital (WACC)?
2a. Capital Autos Corp. has a target capital structure of 60% common stock, 5% preferred stock...
2a. Capital Autos Corp. has a target capital structure of 60% common stock, 5% preferred stock and 35% debt. Its cost of equity is 9%, the cost of preferred stock is 6% and the cost of debt is 5%. The marginal tax rate for the firm is 35%. Calculate the weighted average cost of capital (WACC). 15 pt. 2b. If the variance ABC's stock is 0.49% while its expected return is 18%. What is its coefficient of variation? (5 pt.)
please answer both parts to question 1. The basic WACC equation The calculation of WACC involves...
please answer both parts to question
1. The basic WACC equation The calculation of WACC involves calculating the weighted average of the required rates of return on debt, preferred stock, and common equity, where the weights equal the percentage of each type of financing in the firm's overall capital structure. is the symbol that represents the before-tax cost of debt in the weighted average cost of capital (WACC) equation. Wyle Co. has $2.7 million of debt, $1.5 million of preferred...
Question completion Status: Question 19 (Take a note of the information of your calculation because you...
Question completion Status: Question 19 (Take a note of the information of your calculation because you need the information for the last question Debt 20 bonds with 8 % coupon rate, payable annually, 51.000 par value, 15 years to maturity, selling at $970 per bond. Common Stock 500 shares of common stock outstanding. The stock sells for a price of $112 per share and has a beta of 1.6 Preferred Stock 110 preferred shares outstanding, currently trading at $120 per...
Given the following information: Percent of capital structure: points Debt Preferred stock Common equity 30% 15...
Given the following information: Percent of capital structure: points Debt Preferred stock Common equity 30% 15 eBook Additional information: Hint Bond coupon rate Bond yield to maturity Dividend, expected common Dividend, preferred Price, common Price, preferred Flotation cost, preferred Growth rate Corporate tax rate 10% 8% $ 4.00 $ 11.00 $ 55.00 $ 104.00 $ 5.50 Print 7% References 30% Calculate the Hamilton Corp.'s weighted cost of each source of capital and the weighted average cost of capital. (Do not...
Question Completion Status: Debt 20 bonds with 8 % coupon rate, payable annually, 51.000 par value,...
Question Completion Status: Debt 20 bonds with 8 % coupon rate, payable annually, 51.000 par value, 15 years to maturity, selling at 5970 per bond. 500 shares of common stock outstanding. The stock sells for a price of 5112 per share and has a beta of 1.6 Common Stock Preferred Stock 110 preferred shares outstanding, currently trading at $120 per share with a annual dividend payment of 57 Market The market risk premium is 996 and the risk free rate...
show work please! Kuhn Co. has a target capital structure of 35% debt, 2% preferred stock,...
show work please!
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14) Metals Corp. has $2,575,000 of debt, the market value of preferred stock is $1,550,000 and of common stock is $18,125,000. Metals Corp.'s after-tax cost of debt is 5.25%, preferred stock has a cost of 6.35%, and newly issued common stock has a cost of 14.05%. What is Metals Corp.'s weighted average cost of capital? Ob) 10.8% O c) 8.3% od) 12.5% a) 12.8%
Question 3 WACC)orelkely be y. ABC Co. has a capital structure which is based on 30% debt, 10% preferred stock, and 60% common stock. The pre-tax cost of debt is 8%, the cost of preferred stock is 9%, and the cost of common stock is 11%. The company's tax rate is 34%. What is ABC's weighted average cost of capital (WACC)?
2a. Capital Autos Corp. has a target capital structure of 60% common stock, 5% preferred stock and 35% debt. Its cost of equity is 9%, the cost of preferred stock is 6% and the cost of debt is 5%. The marginal tax rate for the firm is 35%. Calculate the weighted average cost of capital (WACC). 15 pt. 2b. If the variance ABC's stock is 0.49% while its expected return is 18%. What is its coefficient of variation? (5 pt.)
please answer both parts to question
1. The basic WACC equation The calculation of WACC involves calculating the weighted average of the required rates of return on debt, preferred stock, and common equity, where the weights equal the percentage of each type of financing in the firm's overall capital structure. is the symbol that represents the before-tax cost of debt in the weighted average cost of capital (WACC) equation. Wyle Co. has $2.7 million of debt, $1.5 million of preferred...
Question completion Status: Question 19 (Take a note of the information of your calculation because you need the information for the last question Debt 20 bonds with 8 % coupon rate, payable annually, 51.000 par value, 15 years to maturity, selling at $970 per bond. Common Stock 500 shares of common stock outstanding. The stock sells for a price of $112 per share and has a beta of 1.6 Preferred Stock 110 preferred shares outstanding, currently trading at $120 per...
Given the following information: Percent of capital structure: points Debt Preferred stock Common equity 30% 15 eBook Additional information: Hint Bond coupon rate Bond yield to maturity Dividend, expected common Dividend, preferred Price, common Price, preferred Flotation cost, preferred Growth rate Corporate tax rate 10% 8% $ 4.00 $ 11.00 $ 55.00 $ 104.00 $ 5.50 Print 7% References 30% Calculate the Hamilton Corp.'s weighted cost of each source of capital and the weighted average cost of capital. (Do not...
Question Completion Status: Debt 20 bonds with 8 % coupon rate, payable annually, 51.000 par value, 15 years to maturity, selling at 5970 per bond. 500 shares of common stock outstanding. The stock sells for a price of 5112 per share and has a beta of 1.6 Common Stock Preferred Stock 110 preferred shares outstanding, currently trading at $120 per share with a annual dividend payment of 57 Market The market risk premium is 996 and the risk free rate...
show work please!
Kuhn Co. has a target capital structure of 35% debt, 2% preferred stock, and 63% common equity. The tax rate is 40% The yield to maturity on the new bonds is 8.7%. Its cost of preferred stock is 8.67% and its cost of retained earnings is 20%. • If the firm have to issue new common stock, its common stock is currently selling for $22.35 per share, and it just paid a dividend of $2.55. Floatation costs...
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