Question 301 pts
Daves Inc. recently hired you as a consultant to estimate the company’s WACC. You have obtained the following information. (1) The firm's noncallable bonds mature in 20 years, have an 8.00% annual coupon, a par value of $1,000, and a market price of $1,150.00. (2) The company’s tax rate is 40%. (3) The risk-free rate is 4.50%, the market risk premium is 5.50%, and the stock’s beta is 1.20. (4) The target capital structure consists of 35% debt and the balance is common equity. The firm uses the CAPM to estimate the cost of equity, and it does not expect to issue any new common stock. What is its WACC? Do not round your intermediate calculations. (Hint: rd will come from the YTM on the bond)
You were hired as a consultant to Quigley Company, whose target capital structure is 35% debt, 10% preferred, and 55% common equity. The interest rate on new debt is 6.50%, the yield on the preferred is 6.00%, the cost of retained earnings is 10.75%, and the tax rate is 40%. The firm will not be issuing any new stock. What is Quigley's WACC? Round final answer to two decimal places. Do not round your intermediate calculations.
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You were hired as a consultant to Quigley Company, whose target capital structure is 35% debt, 10% preferred, and 55% common equity. The interest rate on new debt is 6.50%, the yield on the preferred is 6.00%, the cost of retained earnings is 14.75%, and the tax rate is 40%. The firm will not be issuing any new stock. What is Quigley's WACC? Round final answer to two decimal places. Do not round your intermediate calculations. a. 8.36% b. 9.17%...
You were hired as a consultant to Quigley Company, whose target capital structure is 35% debt, 10% preferred, and 55% common equity. The interest rate on new debt is 6.50%, the yield on the preferred is 6.00%, the cost of retained earnings is 10-50%, and the tax rate is 25. The firm will not be issuing any new stock. What is Quigley's WACC Round final answer to two decimal places. Do not round your intermediate calculations. O 09.37% O b....
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...
Daves Inc. recently hired you as a consultant to estimate the company's WACC. You have obtained the following information. (1) The firm's noncallable bonds mature in 20 years, have an 8.00% annual coupon, a par value of $1,000, and a market price of $1,225.00 (2) The company's tax rate is 40%. (3) The risk-free rate is 4.50%, the market risk premium is 5.50%, and the stock's beta is 1.20. (4) The target capital structure consists of 35% debt and the...
Daves Inc. recently hired you as a consultant to estimate the company's WACC. You have obtained the following information. (1) The firm's noncallable bonds mature in 20 years, have an 8.00% annual coupon, a par value of $1,000, and a market price of $1,000.00. (2) The company's tax rate is 25%. (3) The risk-free rate is 4.50%, the market risk premium is 5.50%, and the stock's beta is 1.20. (4) The target capital structure consists of 35% debt and the...
Daves Inc. recently hired you as a consultant to estimate the company's WACC. You have obtained the following information. (1) The firm's noncallable bonds mature in 20 years, have an 8.00% annual coupon, a par value of $1,000, and a market price of $1,225.00. (2) The company's tax rate is 40%. (3) The risk-free rate is 4.50%, the market risk premium is 5.50%, and the stock's beta is 1.20. (4) The target capital structure consists of 35% debt and the...
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%, the cost of preferred is 7.50%, and the common stock has the following CAPM data: risk free rate of 5%, market risk premium of 6%, and beta 1.05. The firm will not be issuing any new stock. What is its WACC
Bronz Snails company hired you as a consultant to estimate the company’s WACC . The firm’s target capital structure is 30.5% Debt, 13.1% Preferred stock and 56.4% Common Equity. The Firms noncallable bonds mature in 15years. The bonds have a 9.5% annual coupon rate, a par value of $1,000 and a market price of $1,135. Bonds pay coupon payments semi annually. The firm has 200,000 bonds outstanding. The firm has 7%, $100 par value preferred stocks. There are 1M shares...
To estimate the company's WACC Marshall, Inc. recently hired you as a consultant. You have obtained the following information. (1) The firm's noncallable bonds mature in 20 years, have an 8% annual coupon, a par value of $1000, and a market price of $1050. (2) The company's tax rate is 25%. (3) The risk rate is 4.50%, the market risk premium is 5.50%, and the stocks beta is 1.20. (4) The target capital structure consists of 35% debt and the...
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)