ZuoTi.Pro
Question

Question 7 (1 point) A firm has an effective (after-tax) cost of debt of 4%, and its weight of debt is 40%. Its equity cost o
business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

WACC of Firm = Cost of Debt x Weight of Debt + Cost of Equity x Weight of Equity

WACC of Firm = 4% x 40% + 12% x 60%

WACC of Firm = 8.8%

0 0
Add a comment
Know the answer?
Add Answer to:
Question 7 (1 point) A firm has an effective (after-tax) cost of debt of 4%, and...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Question 6 (1 point) A firm has an effective (after-tax) cost of debt of 3%, and...

    Question 6 (1 point) A firm has an effective (after-tax) cost of debt of 3%, and its weight of debt is 40%. Its equity cost of capital is 12%, and its weight of equity is 60%. Calculate the firm's weighted average cost of capital (WACC). [Enter your answer as a percentage rounded to two decimal places.] Your Answer: Answer

  • A firm has an effective (after-tax) cost of debt of 5%, and its weight of debt...

    A firm has an effective (after-tax) cost of debt of 5%, and its weight of debt is 40%. Its equity cost of capital is 12%, and its weight of equity is 60%. Calculate the firm's weighted average cost of capital (WACC). [Enter your answer as a percentage rounded to two decimal places.]

  • A firm has an effective (after-tax) cost of debt of 3%, and its weight of debt...

    A firm has an effective (after-tax) cost of debt of 3%, and its weight of debt is 40%. Its equity cost of capital is 9%, and its weight of equity is 60%. Calculate the firm's weighted average cost of capital (WACC). [Enter your answer as a percentage rounded to two decimal places.]

  • A firm has an effective (after-tax) cost of debt of 3%, and its weight of debt...

    A firm has an effective (after-tax) cost of debt of 3%, and its weight of debt is 40%. Its equity cost of capital is 9%, and its weight of equity is 60%. Calculate the firm's weighted average cost of capital (WACC). [Enter your answer as a percentage rounded to two decimal places.]

  • A firm has an effective (after-tax) cost of debt of 5%, and its weight of debt is 40%

    1 A firm has an effective (after-tax) cost of debt of 5%, and its weight of debt is 40%. Its equity cost of capital is 12%, and its weight of equity is 60%. Calculate the firm's weighted average cost of capital (WACC). [Enter your answer as a percentage rounded to two decimal places.] 2 In which one of the following situations would the payback method be the preferred method of analysis? 1) A project that can easily be expanded 2) Two mutually exclusive...

  • A firm has a market capitalization (market value of equity) of $16 Billion and net debt of $12 Billion

    Question 11A firm has a market capitalization (market value of equity) of $16 Billion and net debt of $12 Billion. Calculate the weight of debt in the firm's weighted average cos of capital (WACC) calculation. (Note: Enter your answer as a percentage rounded to two decimal places.] Question 12A firm has an effective (after-tax) cost of debt of 3%, and its weight of debt is 40%. Its equity cost of capital is 9%, and its weight of equity is 60%. Calculate...

  • 22) A firm has an effective (after-tax) cost of debt of 3%, and its weight of...

    22) A firm has an effective (after-tax) cost of debt of 3%, and its weight of debt is 40%. Its equity cost of capital is 11%, and its weight of equity is 60%. Calculate the firm’s weighted average cost of capital (WACC). [Enter your answer as a decimal rounded to four decimal places.] 23) A firm is considering an investment project that costs $250,000 today and $250,000 in one year, but would produce benefits of $50,000 a year, starting in...

  • i need help with these two questions Question 22 (1 point) A firm has an effective...

    i need help with these two questions Question 22 (1 point) A firm has an effective (after-tax) cost of debt of 4%, and its weight of debt is 40%. Its equity cost of capital is 12%, and its weight of equity is 60%. Calculate the firm's weighted average cost of capital (WACC). [Enter your answer as a decimal rounded to four decimal places.] Your Answer: Answer D View hint for Question 22 Question 23 (1 point) A firm is considering...

  • Question 7 (1 point) A firm has determined its target capital structure and it after-tax cost...

    Question 7 (1 point) A firm has determined its target capital structure and it after-tax cost for each source of capital. What is the firm's weighted average cost of capital (WACC)? (Enter your answers as a percentge rounded to 2 decimal places) Source of Capital Proportion Cost Long-term Debt (after taxes) 30% 3% Preferred Stock 10% 9% Common Stock 60% 14% Your Answer: Answer Page 2 of 3 Next Page

  • Question 11 (0.2 points) A firm has $6 Billion in debt outstanding with a yield to...

    Question 11 (0.2 points) A firm has $6 Billion in debt outstanding with a yield to maturity of 8%. The firm pays taxes at the rate of 27%. What is the firm's effective (after-tax) cost of debt? [Enter your answer as a percentage rounded to two decimal places.] Your Answer: Answer units View hint for Question 11 Question 12 (0.2 points) A firm has a market capitalization (market value of equity) of $11 Billion and net debt of $3 Billion....

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT