WACC=(VE×Re)+(VD×Rd×(1−Tc))
WACC formula is the summation of two terms:
\left ( \frac{ E }{ V} \times Re \right )(VE×Re)
\left ( \frac{ D }{ V} \times Rd \times ( 1 - Tc ) \right )(VD×Rd×(1−Tc)
5.Calculate the WAAC with the following information: Equity InformationDebt Information 10,000 shares$200,000 in outstanding debt (face...
Calculate the WACC with the following information: Equity Information Debt Information 10,000 shares $200,000 in outstanding debt (face value) $60 per share Beta = 1.28 Current quote = 100 Market risk premium = 10% Annual coupon rate = 10% Risk-free rate = 4% Tax rate = 30%
Calculate the WACC with the following information: Equity Information Debt Information 10,000 shares $200,000 in outstanding debt (face value) $60 per share Beta = 1.28 Current quote = 100 Market risk premium = 10% Annual coupon rate = 10% Risk-free rate = 4% Tax rate = 30% Please Please show it step by step and explain it a little bit more, thanks!!!
Given the following information on Ke-Ma-Gen Ltd., what is its WACC? Debt: Number of bonds = 10,000 Par value = $1,000 Coupon rate = 9% (semi-annual coupons) Time to maturity = 10 years Market value = 98% of par Common equity: Number of shares outstanding = 1,000,000 Par value = $1 Price per share = $3.50 Dividends per share = $0.70 Preferred equity: Number of shares outstanding = 50,000 Price per share = $20 Dividend yield = 5% Other information:...
1) Company XYZ has 8.3 million shares outstanding. The current share price is $53, and the book value per share is $4. XYZ has two bonds outstanding. a) Bond 1 has a face value of $70 million and a 7 percent Coupon rate and sells for 108.3% of par. b) Bond 2 has a face value of $60 million and 7.5% coupon rate and sells for 108.9% of par. Bond 1 matures in 8 years, Bond 2 matures in 27...
Problem Solving: Given the following information, what is the WACC? Commom Stock: 1 million shares outstanding, $40 per share, $1 par value, beta = 1.3; 10,000 bonds outstanding, $1,000 face value each, 8% annual coupon, 22 years to maturity, market price = $1,101.23 per bond Market risk Premium = 8.6 %, risk-free rate = 5%, marginal tax rate = 35%
Equity Information i. 50 million shares ii. $80 per share iii. Beta = 1.11 iv. Market risk premium = 7% v. Risk-free rate = 2% Debt Information i. $1 billion in outstanding debt (face value) ii. Current quote = 108 iii. Coupon rate=9%, semiannual coupons iv. 15 years to maturity v. Tax rate=35% What is the cost of equity? 29. a. 0.79% b. 1.79% c. 2.79% d. 3.79% e. 4.79% f. 5.97% g. 6.69% h. 9.77% i. 10.12% j. 11.06%
Problem 13-9 Calculating the WACC Hero Manufacturing has 8.3 million shares of common stock outstanding. The current share price is $79 and the book value per share is $4. The company also has two bond issues outstanding. The first bond issue has a face value of $85 million, a coupon rate of 6.4 percent and sells for 108.1 percent of par. The second issue has a face value of $65.8 million, a coupon rate of 7.6 percent and sells for...
Hook co. has sh.100 million face value of outstanding debt with a coupon of 10% and a par value of sh. 1000. The bonds make annual payments, have a current market of sh. 1025 and are redeemable at par after 10 years. The company also has 1 million shares of common stock with book value per share of $ 35 and a market value per share of $ 50. The current beta of the stock is 1.5 the Treasury bill...
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...
Suppose ABC Co. has the following financial information: Debt: 25,000 bonds outstanding with a face value of $1,000. The bonds currently trade at 91% of par and have 10 years to maturity. The coupon rate equals 3%, and the bonds make semi-annual interest payments. Preferred stock: 300,000 shares of preferred stock outstanding; currently trading for $153 per share and it pays a dividend of $6.40 per share every year. Common stock: 1,000,000 shares of common stock outstanding; currently trading for...