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Firm X has 1 million shares of common stock @ $10 par value. The shares are...
KEN FLOWER FARM has a 4 million shares of common stock currently trading at Ksh 240 per share. Current risk free rate is 16%, market risk premium is 32% and the company has a beta of 2.4. It also has 200,000 bonds with par paying 20% coupon annually maturing in 20 years currently trading at 19,000. The tax rate is 30%. Calculate the weighted average cost of capital.
Suppose a firm has 33 million shares of common stock outstanding at a price of $40 per share. The firm also has 200,000 bonds outstanding with a current price of $1005.2. The outstanding bonds have yield to maturity 10.8%. The firm's common stock beta is 1.2 and the corporate tax rate is 36%. The expected market return is 12% and the T-bill rate is 6%. What is the WACC for this firm? (All answers should be in the format of...
Question 2 Orange Corp has 1 million shares outstanding, and the stock is currently trading at $10 per share. The company has two different bonds outstanding. First, it has 5000 zero coupon bonds outstanding. Each zero coupon bond has a face value of $1000, will mature in 5 years, and is currently priced at 65% of face value. Second, the company has 5000 coupon paying bonds outstanding. Each coupon paying bond is currently priced at $940.00, and the YTM is...
Question 2 Orange Corp has 1 million shares outstanding, and the stock is currently trading at $10 per share. The company has two different bonds outstanding. First, it has 5000 zero coupon bonds outstanding. Each zero coupon bond has a face value of $1000, will mature in 5 years, and is currently priced at 65% of face value. Second, the company has 5000 coupon paying bonds outstanding. Each coupon paying bond is currently priced at $940.00, and the YTM is...
A company has $89 million in outstanding bonds, and 10 million shares of stock currently trading at $34 per share.The bonds pay an annual coupon rate of 8% and is trading at par. The company's beta is 1.2, its tax rate is 40%, the risk-free rate is 2%, and the market risk premium is 5%. What is this firm's WACC?
You have collected the following information on Watson Company:· Watson has just paid a dividend of $3 and has expected dividend growth of 4.8% per year· Watson has a $20 million debt issue outstanding ($1000 par) with a 6% coupon rate. The debt has semi annual coupons and matures in five years. The bonds are selling at 95% of par· The company has a 40% tax rate· Watson also has 500,000 preferred shares outstanding. They are trading at $65 per...
Adjusted WACC. Thorpe and Company is currently an all-equity firm. It has three million shares selling for $33 per share. Its beta is 0.8, and the current risk-free rate is 3.6%. The expected return on the market for the coming year is 11.7%.Thorpe will sell corporate bonds for $33,000,000 and retire common stock with the proceeds. The bonds are twenty-year semiannual bonds with a 9.3% coupon rate and $1,000 par value. The bonds are currently selling for $885.43 per bond....
Q1) Suppose a firm has 33.30 million shares of common stock outstanding at a price of $26.25 per share. The firm also has 361000.00 bonds outstanding with a current price of $1,108.00. The outstanding bonds have yield to maturity 6.63%. The firm's common stock beta is 1.811 and the corporate tax rate is 40.00%. The expected market return is 11.04% and the T-bill rate is 3.42%. Compute the following: a) Weight of Equity of the firm (2 points) b) Weight...
UUSLUTUU Orange Corp has 1 million shares outstanding, and the stock is currently trading at $10 per share. The company has 5000 coupon bonds outstanding. Each coupon bond has a 11% annual coupon, face value of $1000, will mature in 5 years, and is currently priced at 94% of face value. You have decided to calculate the cost of equity using the SML equation. You have estimated that the niska free rate is 5%, and the expected rate of return...
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...