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.]
Homework Answers
WACC = (after tax cost of debt * weightage of debt in capital structure) + (cost of equity * weightage of equity in the capital structure)
WACC = (0.05 * 0.4) + (0.12 * 0.6)
WACC = 0.02 + 0.072
WACC = 0.092
WACC = 9.20%
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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 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.]
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
Question 7 (1 point) A firm has an effective (after-tax) cost of debt of 4%, and...
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 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 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...
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...
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...
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....
A firm has determined its target capital structure and it after-tax cost for each source of...
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) Cost 49 Source of Capital Long-term Debt (after taxes) Preferred Stock Common Stock Proportion 30% 10% 60% 10% 16% Your Answer: Answer Hide hint for Question 11 Weight average cost of capital= weight of long-term debt cost of debt(after tax)+weight of preferred...
period is less than one year. 04) The payback rule is biased in favor of long-term...
period is less than one year. 04) The payback rule is biased in favor of long-term projects The payback period considers the timing and amount of all of a project's cash 5) flows. Question 6 (1 point) A firm has $6 Billion in debt outstanding with a yield to maturity of 6 %. The firm pays taxes at the rate of 38 %. What is the firm's effective (after-tax) cost of debt? [Enter your answer as a percentage rounded to...
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
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 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
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....
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) Cost 49 Source of Capital Long-term Debt (after taxes) Preferred Stock Common Stock Proportion 30% 10% 60% 10% 16% Your Answer: Answer Hide hint for Question 11 Weight average cost of capital= weight of long-term debt cost of debt(after tax)+weight of preferred...
period is less than one year. 04) The payback rule is biased in favor of long-term projects The payback period considers the timing and amount of all of a project's cash 5) flows. Question 6 (1 point) A firm has $6 Billion in debt outstanding with a yield to maturity of 6 %. The firm pays taxes at the rate of 38 %. What is the firm's effective (after-tax) cost of debt? [Enter your answer as a percentage rounded to...
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