you were hired as a consultant to Giambono Company, whose target capital structure is 40% debt,...
Homework Answers
As per CAPM, cost of common equity = risk free rate + market risk premium *beta
= 5% + 6%*1.05
= 11.30%
WACC = (Cost of Debt * Weight of Debt) + (Cost of Equity * Weight of Equity)+ (Cost of Preferred Stock * Weight of Preferred Stock )
= (40%*6%)+(15%*7.50%)+(45%*11.30%)
= 8.61%
Answer = 8.61%
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you were hired as a consultant to Giambono Company, whose
target capital structure is 40% debt,...
You were hired as a consultant to Giambono Company, whose target capital structure is 40%...
You were hired as a consultant to Giambono Company, whose target capital structure is 40% debt, 15% preferred, and 45% common equity. The after-tax cost of debt is 6.00%, the cost of preferred is 7.50%, and the cost of common equity is 12.25%. The firm will not be issuing any new stock. What is its WACC? Answer is a percentage
You were hired as a consultant to Giambono Company, whose target capital structure is 40% debt, 15% preferred, and 45%...
You were hired as a consultant to Giambono Company, whose target capital structure is 40% debt, 15% preferred, and 45% common equity. The after-tax cost of debt is 6.00%, the cost of preferred is 7.50%, and the cost of retained earnings is 11.50%. The firm will not be issuing any new stock. What is its WACC? 8.70% 07.92% 8.87% 7.66%
You were hired as a consultant to Giambono Company, whose target capital structure is 40% debt, 15% preferred, and 45% common equity
You were hired as a consultant to Giambono Company, whose target capital structure is 40% debt, 15% preferred, and 45% common equity. The after-tax cost of debt is 6.00%, the cost of preferred is 7.50%, and the cost of retained earnings is 12.75%. The firm will not be issuing any new stock. What is its WACC? (Points : 5) 8.98% 9.26% 9.54% 9.83% 10.12%
You were hired as a consultant to Giambono Company, whose target capital structure is 40% debt,...
You were hired as a consultant to Giambono Company, whose target capital structure is 40% debt, 15% preferred stock, and 45% common equity. The cost of debt is 9.00%, cost of preferred stock is 7%, and cost of common equity is 12.75%. The tax rate is 40%. What is its WACC? A) 8.73% B) 8.95% C) 9.12% D) 8.81% E) 8.68%
You were hired as a consultant to Giambono Company, whose target capital structure is 40% debt, 15% preferred, and 45% common equity. The after-tax cost of debt is 6.00%, the cost of preferred is 7.50%, and the cost of retained earnings is 11.50%. The fir
You were hired as a consultant to Giambono Company, whose target capital structure is 40% debt, 15% preferred, and 45% common equity. The after-tax cost of debt is 6.00%, the cost of preferred is 7.50%, and the cost of retained earnings is 11.50%. The firm will not be issuing any new stock. What is its WACC?
You were hired as a consultant to Quigley Company, whose target capital structure is 40% debt,...
You were hired as a consultant to Quigley Company, whose target capital structure is 40% debt, 10% preferred, and 50% common equity. The interest rate on new debt is 6.50%, the yield on the preferred is 7.50%, the cost of retained earnings is 13.25%, and the tax rate is 34%. The firm will not be issuing any new stock. What is Quigley's WACC? Enter your answer rounded to two decimal places. Do not enter % in the answer box. For...
You were hired as a consultant to Disney, whose target capital structure is 36 % debt,...
You were hired as a consultant to Disney, whose target capital structure is 36 % debt, 13 % preferred, and 52 % common equity. The before-tax cost of debt is 9 %, the cost of preferred stock is 12 %, and the cost of equity is 14 %. The firm will not be issuing any new stock. Tax rate is 21%. What is its WACC? (use weights in decimals)
You were hired as a consultant to Gambino Company, whose target capital structure is 60% debt,...
You were hired as a consultant to Gambino Company, whose target capital structure is 60% debt, 15% preferred, and 25% common equity. The before-tax cost of debt is 8.00%, the cost of preferred is 7.02%, and the cost of retained earnings is 15.75%. The firm will not be issuing any new stock. What is its WACC? State in percentage terms without the percent sign symbol and round to the second decimal place. (Thus, 12.98756% would be written as 12.99 to...
You were hired as a consultant to Okland Company, whose target capital structure is 51% debt,...
You were hired as a consultant to Okland Company, whose target capital structure is 51% debt, and 49% common equity. The interest rate on new debt is 5.40%, the cost of retained earnings is 13.60%, and the tax rate is 22% The firm will not be issuing any new stock. What is Okland's WACC?
You were hired as a consultant to Delta State Laundry Services, whose target capital structure is...
You were hired as a consultant to Delta State Laundry Services, whose target capital structure is 35% debt, 10% preferred, and 55% common equity. The interest rate on new debt is 6.5%, the yield on the preferred stock is 6%, the cost of retained earnings is 11.25%, and the tax rate is 40%. The firm will not be issuing any new stock. What is Delta State Laundry Services WACC?
You were hired as a consultant to Giambono Company, whose target capital structure is 40% debt, 15% preferred, and 45% common equity. The after-tax cost of debt is 6.00%, the cost of preferred is 7.50%, and the cost of retained earnings is 11.50%. The firm will not be issuing any new stock. What is its WACC? 8.70% 07.92% 8.87% 7.66%
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