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A firm has a debt-equity ratio of 1.4. The company's outstanding bonds have a 10% coupon...
A firm has the following capital structure. Assume the company's tax rate is 25% Debt: the firm has 5,000 6% coupon bonds outstanding $1000 par value, 11 years to maturity selling for 103 percent...
A firm has the following capital structure. Assume the company's tax rate is 25% Debt: the firm has 5,000 6% coupon bonds outstanding $1000 par value, 11 years to maturity selling for 103 percent of par: the bonds make semiannual payments. Common Stock: The firm has 375000 shares outstanding, selling for $65 per share; the beta is 1.08 Preferred Stock: The firm has 15,000 shares of 5% preferred stock outstanding, currently selling for $75 per share. There is currently a...
Firm Z has outstanding bonds with a 5% coupon that mature in 10 years and are...
Firm Z has outstanding bonds with a 5% coupon that mature in 10 years and are currently selling for $975. The firm’s managers believe that they can raise new debt at a similar rate. The firm’s tax-rate is 30%. Also, the firm’s beta is 1.5, the market risk premium is 6% and the risk-free rate is 3%. If the firm’s target capital structure is evenly split between debt and common equity but no preferred stock, what is the firm’s weighted...
Consider the following information on Budget Plc: Debt: 80,000 9 coupon bonds outstanding with par value...
Consider the following information on Budget Plc: Debt: 80,000 9 coupon bonds outstanding with par value of $1,000 and 18 years to maturity, selling for 108 percent of par, the bonds make semiannual payments. Common stock: 415,000 shares outstanding, selling for $65 per share: the beta is 1.25 Preferred stock: 100,000 shares of 4.5 percent preferred stock outstanding, currently selling for $103 per share (par value=100) Market: 8 percent market risk premium and 2.8 percent risk free rate. Assume the...
Problem 14-10 Taxes and WACC [LO3] Lannister Manufacturing has a target debt-equity ratio of .45. Its...
Problem 14-10 Taxes and WACC [LO3] Lannister Manufacturing has a target debt-equity ratio of .45. Its cost of equity is 11 percent, and its cost of debt is 6 percent. If the tax rate is 25 percent, what is the company’s WACC? ( Debt: 8,000 5.7 percent coupon bonds outstanding, $1,000 par value, 23 years to maturity, selling for 105 percent of par; the bonds make semiannual payments. Common stock: 410,000 shares outstanding, selling for $59 per share; the beta...
Bermuda Cruises issues only common stock and coupon bonds. The firm has a debt–equity ratio of...
Bermuda Cruises issues only common stock and coupon bonds. The firm has a debt–equity ratio of .75. The cost of equity is 11.6 percent and the pretax cost of debt is 6.7 percent. What is the capital structure weight of the firm's equity if the firm's tax rate is 40 percent?
Bermuda Cruises issues only common stock and coupon bonds. The firm has a debt–equity ratio of...
Bermuda Cruises issues only common stock and coupon bonds. The firm has a debt–equity ratio of 1.25. The cost of equity is 12.7 percent and the pretax cost of debt is 7.2 percent. What is the capital structure weight of the firm's equity if the firm's tax rate is 39 percent? Multiple Choice .5162 .5556 .4444 .4166 .4897
Your firm has a $250,000 of debt outstanding that is selling at par. These bonds have...
Your firm has a $250,000 of debt outstanding that is selling at par. These bonds have a coupon rate of 7 percent. What is the amount of the annual interest tax shield given a tax rate of 35 percent?
Problem 3 (10 marks) Husky Manufacturing Inc. currently has $15,000,000 in bonds outstanding with a coupon...
Problem 3 (10 marks) Husky Manufacturing Inc. currently has $15,000,000 in bonds outstanding with a coupon rate of 5% that is paid semi-annually. The bonds will mature in 5 years are currently selling at a quoted price of 92. The company also has 30,000 shares of 7% preferred stock outstanding currently selling for $95 per share with a par value of $100. In addition, the company has 500,000 common shares outstanding selling for $60 per share and with a book...
Skillet Industries has a debt-equity ratio of 1.6. Its WACC is 8.4 percent, and its cost...
Skillet Industries has a debt-equity ratio of 1.6. Its WACC is 8.4 percent, and its cost of debt is 6.9 percent. The corporate tax rate is 35 percent. a. What is the company's cost of equity capital? (Round your answer to 2 decimal places. (e.g., 32.16)) Cost of equity capital % b. What is the company's unlevered cost of equity capital? (Round your answer to 2 decimal places. (e.g., 32.16)) Unlevered cost of equity capital c-1 What would the cost...
1. Sixx AM Manufacturing has a target debt—equity ratio of 0.59. Its cost of equity is...
1. Sixx AM Manufacturing has a target debt—equity ratio of 0.59. Its cost of equity is 18 percent, and its cost of debt is 12 percent. If the tax rate is 31 percent, what is the company's WACC? rev: 09_20_2012 12.27% 11.89% 15.11% 13.67% 14.39% 2. The Bet-r-Bilt Company has a 5-year bond outstanding with a 4.30 percent coupon. Interest payments are paid semi-annually. The face amount of the bond is $1,000. This bond is currently selling for 93 percent...
Problem 3 (10 marks) Husky Manufacturing Inc. currently has $15,000,000 in bonds outstanding with a coupon rate of 5% that is paid semi-annually. The bonds will mature in 5 years are currently selling at a quoted price of 92. The company also has 30,000 shares of 7% preferred stock outstanding currently selling for $95 per share with a par value of $100. In addition, the company has 500,000 common shares outstanding selling for $60 per share and with a book...
Skillet Industries has a debt-equity ratio of 1.6. Its WACC is 8.4 percent, and its cost of debt is 6.9 percent. The corporate tax rate is 35 percent. a. What is the company's cost of equity capital? (Round your answer to 2 decimal places. (e.g., 32.16)) Cost of equity capital % b. What is the company's unlevered cost of equity capital? (Round your answer to 2 decimal places. (e.g., 32.16)) Unlevered cost of equity capital c-1 What would the cost...
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