Homework Answers
Debt:
Face Value of Debt = $16,000,000
Market Value of Debt = 89.00% * $16,000,000
Market Value of Debt = $14,240,000
Equity:
Number of shares outstanding = 2,000,000
Current Price = $12.98
Market Value of Common Stock = 2,000,000 * $12.98
Market Value of Common Stock = $25,960,000
Market Value of Firm = Market Value of Debt + Market Value of
Equity
Market Value of Firm = $14,240,000 + $25,960,000
Market Value of Firm = $40,200,000
Weight of Equity = Market Value of Equity / Market Value of
Firm
Weight of Equity = $25,960,000 / $40,200,000
Weight of Equity = 0.6458 or 64.58%
Add Answer to:
McCann Catching, Inc. has 2.00 million shares of stock outstanding. The stock currently sells for $12.98...
McCann Catching, Inc. has 2.00 million shares of stock outstanding. The stock currently sells for $12.87...
McCann Catching, Inc. has 2.00 million shares of stock outstanding. The stock currently sells for $12.87 per share. The firm’s debt is publicly traded and was recently quoted at 89.00% of face value. It has a total face value of $16.00 million, and it is currently priced to yield 10.00%. The risk free rate is 4.00% and the market risk premium is 8.00%. You’ve estimated that the firm has a beta of 1.49. The corporate tax rate is 38.00%. The...
McCann Catching, Inc. has 2.00 million shares of stock outstanding. The stock currently sells for $12.62...
McCann Catching, Inc. has 2.00 million shares of stock outstanding. The stock currently sells for $12.62 per share. The firm’s debt is publicly traded and was recently quoted at 90.00% of face value. It has a total face value of $10.00 million, and it is currently priced to yield 10.00%. The risk free rate is 4.00% and the market risk premium is 8.00%. You’ve estimated that the firm has a beta of 1.17. The corporate tax rate is 38.00%. The...
McCann Catching, Inc. has 2.00 million shares of stock outstanding. The stock currently sells for $12.75...
McCann Catching, Inc. has 2.00 million shares of stock outstanding. The stock currently sells for $12.75 per share. The firm’s debt is publicly traded and was recently quoted at 88.00% of face value. It has a total face value of $11.00 million, and it is currently priced to yield 9.00%. The risk free rate is 4.00% and the market risk premium is 8.00%. You’ve estimated that the firm has a beta of 1.20. The corporate tax rate is 36.00%. The...
**THIS QUESTION HAS 4 PARTS TOTAL** 1. What is the cost of equity? 2. What is...
**THIS QUESTION HAS 4 PARTS TOTAL**
1. What is the cost of equity?
2. What is the percentage of equity used by McCann Catching,
Inc.?
3. What is the WACC for McCann Catching, Inc.?
4. What is the NPV of the expansion? (answer in terms of
millions, so 1,000,000 would be 1.0000)
McCann Catching, Inc. has 2.00 million shares of stock outstanding. The stock currently sells for $12.90 per share. The firm's debt is publicly traded and was recently quoted...
Ramblin Wreck is a firm specializing in engineering components. The firm is publicly traded and is...
Ramblin Wreck is a firm specializing in engineering components. The firm is publicly traded and is considering the following project: The project will last 5.00 years with an annual cash flow of $40.00 million. The project will require an initial investment of $140.00 million The firm must determine the cost of capital to evaluate the project. The project is within the firm's normal activities) Ramblin Wreck, Inc. Financial Data: STOCK DATA: BOND DATA: Current Price Per Share $27.00 Current Price...
**THIS QUESTION HAS 5 PARTS TOTAL** 1. What is the yield to maturity on Ramblin Wreck,...
**THIS QUESTION HAS 5 PARTS
TOTAL**
1. What is the yield to maturity on Ramblin Wreck, Inc.
bonds?
2. What is the cost of equity?
3. What is the weight in debt for the project?
4. What is the WACC for the project?
5. What is the NPV of the project? (express in millions, so
1000000 would be 1.00)
#28 Ramblin Wreck is a firm specializing in engineering components. The firm is publicly traded and is considering the following project:...
Duffy Enterprises has issued common stock, preferred stock, and debt to finance its operation. The table...
Duffy Enterprises has issued common stock, preferred stock, and debt to finance its operation. The table below shows financial information on the firm. 2018 Balance Sheet: Interest bearing deb! $517,152.00 $40,478.00 Preferred stock $750,000.00 Shareholder equity Duffy has publicly traded common stock that has a capitalization currently of $1,503,612.00. An analyst has estimated that the cost of debt for Duffy is 7.00%, the cost of the preferred stock is 8.00%, and the cost of the common equity is 12.00%. Duffy...
Duffy Enterprises has issued common stock, preferred stock, and debt to finance its operation. The table...
Duffy Enterprises has issued common stock, preferred stock, and debt to finance its operation. The table below shows financial information on the firm. 2018 Balance Sheet: $517,152.00 Interest bearing debt $40,478.00 Preferred stock $750,000.00 Shareholder equity Duffy has publicly traded common stock that has a capitalization currently of $1,503,612.00. An analyst has estimated that the cost of debt for Duffy is 7.00%, the cost of the preferred stock is 8.00%, and the cost of the common equity is 12.00%. Duffy...
An investor is looking at a stock that has four possible values in the next year....
An investor is looking at a stock that has four possible values in the next year. The probabilities and returns are shown below. OUTCOME: Probability Return Strong Economy 0.24 25.00% Good Economy 0.26 10.00% Poor Economy 0.32 0.00% Recession 0.18 -11.00% What is the standard deviation of these returns based on the probabilities? Submit Answer format: Percentage Round to: 2 decimal places (Example: 9.24%, % sign required. Will accept decimal format rounded to 4 decimal places (ex: 0.0924)) #10 A...
A company has $106 million in outstanding bonds, and 10 million shares of stock currently trading...
A company has $106 million in outstanding bonds, and 10 million shares of stock currently trading at $31 per share.The bonds pay an annual coupon rate of 9% and is trading at par. The company's beta is 0.8, its tax rate is 40%, the risk-free rate is 3%, and the market risk premium is 4%. What is this firm's WACC? Enter your answer as a percentage, without the percentage sign ('%'), rounded to 1 decimal. For example, if your answer...
**THIS QUESTION HAS 4 PARTS TOTAL**
1. What is the cost of equity?
2. What is the percentage of equity used by McCann Catching,
Inc.?
3. What is the WACC for McCann Catching, Inc.?
4. What is the NPV of the expansion? (answer in terms of
millions, so 1,000,000 would be 1.0000)
McCann Catching, Inc. has 2.00 million shares of stock outstanding. The stock currently sells for $12.90 per share. The firm's debt is publicly traded and was recently quoted...
Ramblin Wreck is a firm specializing in engineering components. The firm is publicly traded and is considering the following project: The project will last 5.00 years with an annual cash flow of $40.00 million. The project will require an initial investment of $140.00 million The firm must determine the cost of capital to evaluate the project. The project is within the firm's normal activities) Ramblin Wreck, Inc. Financial Data: STOCK DATA: BOND DATA: Current Price Per Share $27.00 Current Price...
**THIS QUESTION HAS 5 PARTS
TOTAL**
1. What is the yield to maturity on Ramblin Wreck, Inc.
bonds?
2. What is the cost of equity?
3. What is the weight in debt for the project?
4. What is the WACC for the project?
5. What is the NPV of the project? (express in millions, so
1000000 would be 1.00)
#28 Ramblin Wreck is a firm specializing in engineering components. The firm is publicly traded and is considering the following project:...
Duffy Enterprises has issued common stock, preferred stock, and debt to finance its operation. The table below shows financial information on the firm. 2018 Balance Sheet: Interest bearing deb! $517,152.00 $40,478.00 Preferred stock $750,000.00 Shareholder equity Duffy has publicly traded common stock that has a capitalization currently of $1,503,612.00. An analyst has estimated that the cost of debt for Duffy is 7.00%, the cost of the preferred stock is 8.00%, and the cost of the common equity is 12.00%. Duffy...
Duffy Enterprises has issued common stock, preferred stock, and debt to finance its operation. The table below shows financial information on the firm. 2018 Balance Sheet: $517,152.00 Interest bearing debt $40,478.00 Preferred stock $750,000.00 Shareholder equity Duffy has publicly traded common stock that has a capitalization currently of $1,503,612.00. An analyst has estimated that the cost of debt for Duffy is 7.00%, the cost of the preferred stock is 8.00%, and the cost of the common equity is 12.00%. Duffy...
A company has $106 million in outstanding bonds, and 10 million shares of stock currently trading at $31 per share.The bonds pay an annual coupon rate of 9% and is trading at par. The company's beta is 0.8, its tax rate is 40%, the risk-free rate is 3%, and the market risk premium is 4%. What is this firm's WACC? Enter your answer as a percentage, without the percentage sign ('%'), rounded to 1 decimal. For example, if your answer...
Most questions answered within 3 hours.
-
A researcher wishes to study the cumulative effects of several
combinations of HIV drugs. There are...
asked 15 minutes ago -
How
to make a simple game of whack a mole in pygame
asked 1 minute from now -
Write a c/c++ program to read a list of students from a file and
create a...
asked 7 minutes ago -
Identify two different methods for collecting data in
qualitative research. What are the benefits and challenges...
asked 8 minutes ago -
I am suppose to have my array before the main class but I am
getting the...
asked 10 minutes ago -
Your task is to design the page table for the 32bit Pentium
microprocessor. Answer the following...
asked 16 minutes ago -
The Paradise Shoes Company has estimated its weekly TVC function
from data collected over the past...
asked 15 minutes ago -
Although Epicurus advocates pursuing pleasure for the
good life, discuss a few reasons why he does...
asked 32 minutes ago -
Problem 1: Present entries to record the selected transactions
described below:
(a)
Issued $2,790,000 of 5-year,...
asked 39 minutes ago -
Using technology to support HR activities increases:
a.
the efficiency of the administrative HR functions.
b....
asked 39 minutes ago -
1. List the features used to classify leaf
types.
2. List some characteristics that are shared...
asked 44 minutes ago -
The three elements of Value Proposition, Key Customers, and
Capabilities operate within an environment. Which of...
asked 47 minutes ago