Suppose that MNINK industries capital structure features 63 percent equity 7 percent preferred stock and 30...
Homework Answers
| Sources of funds | % of total capital | Pre tax cost of capital | Post tax cost of capital | % of total capital * Post tax cost of capital |
| Equity | 63% | 11.80% | 11.80% | 7.43% |
| Preferred stock | 7% | 9% | 9.00% | 0.63% |
| Debt | 30% | 9% | 9%*(1-21%) = 7.11% | 2.13% |
| WACC | 10.20% | |||
| Post tax cost of debt = Pre tax cost of debt * (1 - tax rate) | ||||
For preffered stock and equity cost of capital pre and post tax is same
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Suppose that MNINK industries capital structure features 63 percent equity 7 percent preferred stock and 30...
Suppose that MNINK Industries' capital structure features 63 percent equity, 8 percent preferred stock, and 29...
Suppose that MNINK Industries' capital structure features 63 percent equity, 8 percent preferred stock, and 29 percent debt. Assume the before-tax component costs of equity, preferred stock, and debt are 11.70 percent, 9.60 percent, and 9.00 percent, respectively. What is MNINK's WACC if the firm faces an average tax rate of 34 percent? (Round your answer to 2 decimal places.) WACC
1. Suppose that TapDance, Inc.’s, capital structure features 65 percent equity, 35 percent debt, and that...
1. Suppose that TapDance, Inc.’s, capital structure features 65 percent equity, 35 percent debt, and that its before-tax cost of debt is 7 percent, while its cost of equity is 12 percent. Assume the appropriate weighted average tax rate is 34 percent. What will be TapDance’s WACC? (Round your answer to 2 decimal places.) 2. Suppose that MNINK Industries’ capital structure features 63 percent equity, 7 percent preferred stock, and 30 percent debt. Assume the before-tax component costs of equity,...
Suppose that B2B, Inc. has a capital structure of 38 percent equity, 15 percent preferred stock,...
Suppose that B2B, Inc. has a capital structure of 38 percent equity, 15 percent preferred stock, and 47 percent debt. Assume the before-tax component costs of equity, preferred stock, and debt are 14.5 percent, 110 percent, and 9.5 percent, respectively, What is B2B's WACC If the firm faces an average tax rate of 21 percent and can make full use of the interest tax shield? (Round your answer to 2 decimal places.) WACC 1028 %
Suppose that JB Cos. has a capital structure of 80 percent equity, 20 percent debt, and...
Suppose that JB Cos. has a capital structure of 80 percent equity, 20 percent debt, and that its before-tax cost of debt is 14 percemt while its cost of equity is 18 percent. Assume the appropriate weighted-average tax rate is 21 percent and JB estimates that they can make full use of the interest tax shield. What will be JB's WACC? (Round your answer to 2 decimal places.) WACC % Suppose that B2B, Inc. has a capital structure of 35...
Suppose that B2B, Inc. has a capital structure of 37 percent equity, 18 percent preferred stock,...
Suppose that B2B, Inc. has a capital structure of 37 percent equity, 18 percent preferred stock, and 45 percent debt. Assume the before-tax component costs of equity, preferred stock, and debt are 14.5 percent, 11.0 percent, and 9.5 percent, respectively. What is B2B's WACC if the firm faces an average tax rate of 30 percent? (Round your answer to 2 decimal places.)
Suppose that TapDance, Inc.’s capital structure features 70 percent equity, 30 percent debt, and that its...
Suppose that TapDance, Inc.’s capital structure features 70 percent equity, 30 percent debt, and that its before-tax cost of debt is 6 percent, while its cost of equity is 11 percent. Assume the appropriate weighted average tax rate is 21 percent and TapDance estimates they cannot make any use of the interest tax shield in the foreseeable future. What will be TapDance’s WACC?
11-17, WACC. please show formula using Excel 11-15 WACC Suppose lidl Tup 35 percent debt, and...
11-17, WACC. please show formula using Excel
11-15 WACC Suppose lidl Tup 35 percent debt, and that its before-tax cost of UED 10 equity is 13 percent. If the appropriate weighted average tax rate is 34 percent will be TapDance's WACC? (LG11-2) 11-16 WACC Suppose that JB Cos, has a capital structure of 78 percent equity, 22 percent debt, and that its before-tax cost of debt is 11 percent while its cost of equity is 15 percent. If the appropriate...
Suppose that TapDance, Inc.’s capital structure features 75 percent equity, 25 percent debt, and that its...
Suppose that TapDance, Inc.’s capital structure features 75
percent equity, 25 percent debt, and that its before-tax cost of
debt is 8 percent, while its cost of equity is 13 percent. The
appropriate weighted average tax rate is 21 percent.
What will be TapDance’s WACC? (Round your answer to 2
decimal places.)
Suppose that TapDance, Inc.'s capital structure features 75 percent equity, 25 percent debt, and that its before-tax cost of debt is 8 percent, while its cost of equity...
Suppose that JB Cos. has a capital structure of 78 percent equity, 22 percent debt, and...
Suppose that JB Cos. has a capital structure of 78 percent equity, 22 percent debt, and that its before-tax cost of debt is 14 percent while its cost of equity is 18 percent. Assume the appropriate weighted-average tax rate is 21 percent and JB estimates that they can make full use of the interest tax shield. What will be JB’s WACC? (Round your answer to 2 decimal places.)
WACC Suppose that Ferry Landings, Inc., Inc. has a capital structure of 40% common equity, 15%...
WACC Suppose that Ferry Landings, Inc., Inc. has a capital structure of 40% common equity, 15% preferred stock, and 45% debt. If the before-tax component costs of common equity, preferred stock and debt are 15%, 10% and 8%, respectively. What is Ferry Landings, Inc.’s WACC if the firm faces an average tax rate of 30 percent? Using the WACC equation: WACC = E/(E+P+D) x RE + P/(E+P+D) x RP + D/(E+P+D) x RD Where; E = Market value of common...
Suppose that MNINK Industries' capital structure features 63 percent equity, 8 percent preferred stock, and 29 percent debt. Assume the before-tax component costs of equity, preferred stock, and debt are 11.70 percent, 9.60 percent, and 9.00 percent, respectively. What is MNINK's WACC if the firm faces an average tax rate of 34 percent? (Round your answer to 2 decimal places.) WACC
Suppose that B2B, Inc. has a capital structure of 38 percent equity, 15 percent preferred stock, and 47 percent debt. Assume the before-tax component costs of equity, preferred stock, and debt are 14.5 percent, 110 percent, and 9.5 percent, respectively, What is B2B's WACC If the firm faces an average tax rate of 21 percent and can make full use of the interest tax shield? (Round your answer to 2 decimal places.) WACC 1028 %
Suppose that JB Cos. has a capital structure of 80 percent equity, 20 percent debt, and that its before-tax cost of debt is 14 percemt while its cost of equity is 18 percent. Assume the appropriate weighted-average tax rate is 21 percent and JB estimates that they can make full use of the interest tax shield. What will be JB's WACC? (Round your answer to 2 decimal places.) WACC % Suppose that B2B, Inc. has a capital structure of 35...
Suppose that B2B, Inc. has a capital structure of 37 percent equity, 18 percent preferred stock, and 45 percent debt. Assume the before-tax component costs of equity, preferred stock, and debt are 14.5 percent, 11.0 percent, and 9.5 percent, respectively. What is B2B's WACC if the firm faces an average tax rate of 30 percent? (Round your answer to 2 decimal places.)
11-17, WACC. please show formula using Excel
11-15 WACC Suppose lidl Tup 35 percent debt, and that its before-tax cost of UED 10 equity is 13 percent. If the appropriate weighted average tax rate is 34 percent will be TapDance's WACC? (LG11-2) 11-16 WACC Suppose that JB Cos, has a capital structure of 78 percent equity, 22 percent debt, and that its before-tax cost of debt is 11 percent while its cost of equity is 15 percent. If the appropriate...
Suppose that TapDance, Inc.’s capital structure features 75
percent equity, 25 percent debt, and that its before-tax cost of
debt is 8 percent, while its cost of equity is 13 percent. The
appropriate weighted average tax rate is 21 percent.
What will be TapDance’s WACC? (Round your answer to 2
decimal places.)
Suppose that TapDance, Inc.'s capital structure features 75 percent equity, 25 percent debt, and that its before-tax cost of debt is 8 percent, while its cost of equity...
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