Using market value and book value (separately), find the adjusted WACC, using 30% tax rate. Compo...
Using market value and book value (separately), find the adjusted WACC, using 30% tax rate. Component Balance Sheet Value Market Value Cost of Capital TAX Debt 5,000,000.00 6,850,000.00 8% 30% Preferred Stock 4,000,000.00 2,200,000.00 10% Common Stock 2,000,000.00 5,600,000.00 13% ANSWER Book Value Weights Market Value Weights Adjusted WACC Debt Debt Market Value Preferred Stock Preferred Stock Book Value Common Stock Common Stock
Homework Answers
| a)8.55% | ||||
| Statement showing computation basis book Value | ||||
| Particulars | Book Value | Weight | Cost | WACC |
| Long term Debt | 5,000,000.00 | 0.4545 | 5.60% | 2.55% |
| Preferred stock | 4,000,000.00 | 0.3636 | 10.00% | 3.64% |
| Common Stock Equity | 2,000,000.00 | 0.1818 | 13.00% | 2.36% |
| 11,000,000.00 | 1.0000 | 8.55% | ||
| b) WACC is 9.09% | ||||
| Statement showing computation basis market Value | ||||
| Particulars | Market Value | Weight | Cost | WACC |
| Long term Debt | 6,850,000.00 | 0.4676 | 5.60% | 2.62% |
| Preferred stock | 2,200,000.00 | 0.1502 | 10.00% | 1.50% |
| Common Stock Equity | 5,600,000.00 | 0.3823 | 13.00% | 4.97% |
| 14,650,000.00 | 1.0000 | 9.09% |
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Using market value and book value (separately), find the adjusted WACC, using 30% tax rate. Compo...
Using market value and book value (separately), find the adjusted WACC, using 30% tax rate. Component...
Using market value and book value (separately), find the adjusted WACC, using 30% tax rate. Component Balance Sheet Value Market Value Cost of Capital Debt 5,000,000.00 6,850,000.00 8% Preferred Stock 4,000,000.00 2,200,00.00 10% Common Stock 2,000,000.00 5,600,000.00 13%
Using market value and book value (separately), find the adjusted WACC, using 30% tax rate. Please...
Using market value and book value (separately), find the
adjusted WACC, using 30% tax rate.
Please include formulas in the answer. I need to understand how
to calculate the book and market values of debt and stock as shown
in the grey boxes.
Thank You!
Using market value and book value (separately), find the adjusted WACC, using 30% tax rate Component Debt Preferred Stock Common Stock Balance Sheet Value 5,000,000.00 4.000,000.00 2.000,000.00 Market Value Cost of Capital 890 10% 13%...
What is the book value adjusted WACC for Clark Explorers at a tax rate of 35%?...
What is the book value adjusted WACC for Clark Explorers at a
tax rate of 35%?
b. What is the market value adjusted WACC for
Clark Explorers at a tax rate of 30%?
What is the book value adjusted WACC for Clark Explorers at a
tax rate of 30%?
c. What is the market value adjusted WACC for
Clark Explorers at a tax rate of 15%?
What is the book value adjusted WACC for Clark Explorers at a
tax rate...
1) What is the market value adjusted WACC for Clark Explorers at a tax rate of...
1) What is the market value adjusted WACC for Clark Explorers at
a tax rate of 40%
2) What is the book value adjusted WACC for Clark Explorers at a
tax rate of 40%?
3) What is the market value adjusted WACC for Clark Explorers at
a tax rate of 25%
4) What is the book value adjusted WACC for Clark Explorers at a
tax rate of 25%?
5) What is the market value adjusted WACC for Clark Explorers at...
Adjusted WACC. Clark Explorers Inc., an engineering firm, has the following capital structure: Equity Preferred Stock...
Adjusted WACC. Clark Explorers Inc., an
engineering firm, has the following capital structure:
Equity
Preferred Stock
Debt
Market Price
$49.41
$79.61
$970.65
Outstanding units
119,000
14,000
6,224
Book Value
$3,130,000
$1,025,000
$6,224,000
Cost of Capital
16.61%
11.73%
8.8%
Using market value and book value (separately, of course), find
the adjusted WACC for clark explorers at the following tax
rates:
What is the market value adjusted WACC for Clark explorers at a
tax rate of 40%
What is the market value...
Adjusted WACC Clark Explorers, Inc., an engineering firm, has the following capital structure: the adjusted WACC...
Adjusted WACC Clark Explorers, Inc., an engineering firm, has the following capital structure: the adjusted WACC for Clark Explorers at the following tax rates: Using market value and book value (separately, of course), find a 40% b. 30% c. 15% d. 5% a. What is the market value adjusted WACC for Clark Explorers at a tax rate of 40%? % (Round to two decimal places.) © Data Table Click on the Icon in order to copy its content into a...
WACC-Book weights and market weights Webster Company has compiled the information shown in the following table: a. Calc...
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Book value versus market value components. Compare Trout, Inc. with Salmon Enterprises, using the balance sheet...
Book value versus market value components. Compare Trout, Inc. with Salmon Enterprises, using the balance sheet of Trout and the market data of Salmon for the weights in the weighted average cost of capital: EIf the after-tax cost of debt is 8.6% for both companies and the cost of equity is 12.82%, which company has the higher WACC? What is the book value adjusted WACC for Trout, Inc.? Current assets: Long-term assets: Total assets: $2,888,889 $10,111,111 $13,000,000 Trout, Inc. Current...
Using market value and book value (separately), find the
adjusted WACC, using 30% tax rate.
Please include formulas in the answer. I need to understand how
to calculate the book and market values of debt and stock as shown
in the grey boxes.
Thank You!
Using market value and book value (separately), find the adjusted WACC, using 30% tax rate Component Debt Preferred Stock Common Stock Balance Sheet Value 5,000,000.00 4.000,000.00 2.000,000.00 Market Value Cost of Capital 890 10% 13%...
What is the book value adjusted WACC for Clark Explorers at a
tax rate of 35%?
b. What is the market value adjusted WACC for
Clark Explorers at a tax rate of 30%?
What is the book value adjusted WACC for Clark Explorers at a
tax rate of 30%?
c. What is the market value adjusted WACC for
Clark Explorers at a tax rate of 15%?
What is the book value adjusted WACC for Clark Explorers at a
tax rate...
1) What is the market value adjusted WACC for Clark Explorers at
a tax rate of 40%
2) What is the book value adjusted WACC for Clark Explorers at a
tax rate of 40%?
3) What is the market value adjusted WACC for Clark Explorers at
a tax rate of 25%
4) What is the book value adjusted WACC for Clark Explorers at a
tax rate of 25%?
5) What is the market value adjusted WACC for Clark Explorers at...
Adjusted WACC. Clark Explorers Inc., an
engineering firm, has the following capital structure:
Equity
Preferred Stock
Debt
Market Price
$49.41
$79.61
$970.65
Outstanding units
119,000
14,000
6,224
Book Value
$3,130,000
$1,025,000
$6,224,000
Cost of Capital
16.61%
11.73%
8.8%
Using market value and book value (separately, of course), find
the adjusted WACC for clark explorers at the following tax
rates:
What is the market value adjusted WACC for Clark explorers at a
tax rate of 40%
What is the market value...
Adjusted WACC Clark Explorers, Inc., an engineering firm, has the following capital structure: the adjusted WACC for Clark Explorers at the following tax rates: Using market value and book value (separately, of course), find a 40% b. 30% c. 15% d. 5% a. What is the market value adjusted WACC for Clark Explorers at a tax rate of 40%? % (Round to two decimal places.) © Data Table Click on the Icon in order to copy its content into a...
WACC-Book weights and market weights Webster Company has compiled the information shown in the following table: a. Calculate the weighted average cost of capital using book value weights. b. Calculate the weighted average cost of capital using market value weights. c. Compare the answers obtained in parts a and b. Explain the differences. a. The firm's weighted average cost of capital using book value weights is %. (Round to two decimal places.) Data Table (Click on the icon located on...
: . If the after-tax cost of Book value versus market value components. Compare Trout, Inc. with Salmon Enterprises, using the balance sheet of Trout and the market data of Salmon for the weights in the weighted average cost of capital: debt is 7.6% for both companies and the cost of equity is 14.06%, which company has the higher WACC? What is the book value adjusted WACC for Trout, Inc.? % (Round to two decimal places.) Data Table - X...
Book value versus market value components. Compare Trout, Inc. with Salmon Enterprises, using the balance sheet of Trout and the market data of Salmon for the weights in the weighted average cost of capital: EIf the after-tax cost of debt is 8.6% for both companies and the cost of equity is 12.82%, which company has the higher WACC? What is the book value adjusted WACC for Trout, Inc.? Current assets: Long-term assets: Total assets: $2,888,889 $10,111,111 $13,000,000 Trout, Inc. Current...
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