Homework Answers
market weights are more relevant as they represent the current values of debt and equity. If someone wants to buy the shares of the company, he has to buy at current market price and not at issue price or face value. Same true for debt also. So we have to use market value weights.
The appropriate weight of debt = (short term debt + long term debt)/ total capital
The appropriate weight of debt = (2466 + 4272)/42447 = 0.1587 = 15.9%
Answer : 15.9% (Thumbs up please)
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(Defining capital structure weights) In August 2015 the capital structure of the Emerson Electric Corporation (EMR)...
The capital structure weights used in computing the weighted average cost of capital are: Group of...
The capital structure weights used in computing the weighted average cost of capital are: Group of answer choices preferably based on the target capital structure of the firm preferably computed using the book value of debt and the shareholder’s equity constant over time preferably based on the weights adopted by similar firms in the same industry
WACClong dash—Book weights and market weights Webster Company has compiled the information show...
WACClong dash—Book weights and
market weights Webster Company has compiled the information shown
in the following table: LOADING... . 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 nothing%. (Round to two decimal
places.)
WACC-Book weights and market weights...
WACC-Book weights and market weights Webster Company has compiled the information shown in the following table:...
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 - X (Click on the icon...
WACC-Book weights and market weights Webster Company has compiled the information shown in the following table: a. Calc...
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...
WACC-Book weights and market weights Webster Company has compiled the information shown in the following table: a. Calc...
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. %. (Round to two decimal places.) a. The firm's weighted average cost of capital using book value weights is i Data Table (Click on the icon located...
After careful analysis, Dexter Brothers has determined that its optimal capital structure is composed of the...
After careful analysis, Dexter Brothers has determined that its
optimal capital structure is composed of the sources and target
market value weights shown in the following table:
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stock is estimated to be 9.5%;the cost of retained earnings is
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represents 22%,
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WACC—Market value weights The market values and after-tax costs of various sources of capital used by...
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A firm has determined its cost of each source of capital and optimal capital structure, which is composed of the following sources and target market value proportions: Long term debt has a 40% target weight and costs 10% (before tax); the tax rate is 40%. Common Equity weights 50% and it costs 15% whereas preferred equity is 10% and costs 11%. The weighted average cost of capital is Group of answer choices 10.7 percent 11 percent 15 percent 9 percent...
In August 2015, Cisco system had a market capitalization of $140 billion. It had debt of...
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WACClong dash—Book weights and
market weights Webster Company has compiled the information shown
in the following table: LOADING... . 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 nothing%. (Round to two decimal
places.)
WACC-Book weights and market weights...
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 - X (Click on the icon...
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...
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. %. (Round to two decimal places.) a. The firm's weighted average cost of capital using book value weights is i Data Table (Click on the icon located...
After careful analysis, Dexter Brothers has determined that its
optimal capital structure is composed of the sources and target
market value weights shown in the following table:
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stock is estimated to be 9.5%;the cost of retained earnings is
estimated to be13%; and the cost of new common stock is estimated
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