Suppose that QRY Corp. has an equity beta of 1.2. Current risk-free rates are 3% and the expected return on the market portfolio is 12%. QRY Corp has a market value debt-to-equity ratio of 0.5 and faces a 21% tax rate. QRY Corps debt is rated AAA and has an average maturity of 10 years. Assuming that the current market price of AAA bonds paying 5% semi-annual coupons, with 10 years maturity, and par value of $1000 is $900, compute QRY Corps WACC? Enter your answer as a percent without the % sign. Round to two decimals.
=1/1.5*(3%+1.2*(12%-3%))+0.5/1.5*RATE(10*2,5%*1000/2,-900,1000)*2*(1-21%)
=10.87671%
Suppose that QRY Corp. has an equity beta of 1.2. Current risk-free rates are 3% and...
1. Suppose that ABC Corp. has an equity beta of 1.5. Current risk-free rates are 5% and the expected return on the market portfolio is 15%. ABC Corp has a market value debt-to-equity ratio of 0.5, debt that is rated AA, and faces a 21% tax rate. Assuming that the credit spread on AA debt is 2%, compute ABC Corps WACC? Enter your answer as a percent without the % sign. Round to two decimals. 2. Suppose that QRY Corp....
1. Suppose that QRY Corp. has an equity beta of 1.5. Current risk-free rates are 5% and the expected return on the market portfolio is 15%. QRY Corp has a market value debt-to-equity ratio of 0.5, debt that is rated AAA, and faces a 21% tax rate. QRY Corps debt is rate AAA and has an average maturity of 10 years. Assuming that the current market price of AAA bonds paying 5% semi-annual coupon, with 10 years maturity, and par...
Susan's Lemonade, Inc. has a single issue of bonds. The bonds have a face value of $1000, a coupon rate of 5.25% with coupons paid semi-annually, a time to maturity of 2 years, and a current market price of $985.04. The firm is financed with 35% debt and 65% common stock. The firm's common stock has a beta of 1.3. The risk-free rate is 1.56%. The expected return on the market portfolio is 9.6%. The corporate tax rate is 30%....
ABC Corp has a beta of 1.5, the current risk-free interest rate is 3%, and the expected return on the market is 12.0%. The market cap of ABC is $2 billion and the company has one 10-year bond outstanding with face value of $1 billion and coupon of 5%. The bond is trading at a premium price of 110. The company’s marginal tax rate is 25%. What is the ABC’s WACC?
Suppose that XYZ Corp. will generate free-cash-flows (FCF) of $400 at the end of the year. XYZ has a cost of equity capital of 12%, a cost of debt capital of 5%, a market value debt-to-equity ratio of 0.5, and faces a 21% tax rate. Assuming that XYZ’s FCF will grow by 3% per year in the future, what is the value of XYZ Corp? Round your final answer to two decimals?
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Suppose that XYZ Corp. will generate free-cash-flows (FCF) of $300 at the end of the year. XYZ has a cost of equity capital of 15%, a cost of debt capital of 5%, a market value debt-to-equity ratio of 0.5, and faces a 21% tax rate. Assuming that XYZ’s FCF will grow by 3% per year in the future, and XYZ Corp. has in debt with a market value of $2000, what is the value of XYZ’s Corp. equity? Round your...
A corporation has an equity beta of 1.2 and a debt beta of .8. The firm’s market value debt to equity ratio is 0.6. The corporation has a zero tax rate. What is the asset beta?
1 Suppose that XYZ Corp. will generate free-cash-flows (FCF) of $200 at the end of the year. XYZ has a cost of equity capital of 10%, a cost of debt capital of 5%, a market value debt-to-equity ratio of one, and faces a 21% tax rate. Assuming that XYZ’s FCF will grow by 3% per year in the future, what is the value of XYZ Corp? Round your final answer to two decimals? 2 Suppose that XYZ Corp. will generate...
1. Suppose that XYZ Corp. will generate free-cash-flows (FCF) of $200 at the end of the year. XYZ has a cost of equity capital of 10%, a cost of debt capital of 5%, a market value debt-to-equity ratio of one, and faces a 21% tax rate. Assuming that XYZ’s FCF will grow by 3% per year in the future, what is the value of XYZ Corp? Round your final answer to two decimals? 2. Suppose that XYZ Corp. will generate...