Homework Answers
Weight of common stock=100-(38+15)=47%
After-tax cost of bonds=9.16*(1-tax rate)
=9.16*(1-0.4)=5.496%
WACC=Respective costs*Respective weight
=(0.38*5.496)+(0.15*12.27)+(0.47*16.65)
=11.75%(Approx).
Add Answer to:
Given the following information on Big Brothers, Inc. capital structure, compute the company's weighted average cost...
Given the following information on Big Brothers, Inc. capital structure, compute the company's weighted average cost...
Given the following information on Big Brothers, Inc. capital structure, compute the company's weighted average cost of capital (WACC). The company's marginal tax rate is 40%. Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box) Type of Capital Percent of Capital Structure Before-Tax Component Cost Bonds 31% 11.51% Preferred Stock 12% 16.39% Common Stock Please calculate it 17.67%
2. Mercer Sheetmetal Inc.'s capital structure is briefly described below. Compute the company's weighted average cost...
2. Mercer Sheetmetal Inc.'s capital structure is briefly described below. Compute the company's weighted average cost of capital ("WACC"). The company's marginal income tax rate is 35%. Сapital Bonds Percent of Capital Structure Pre-Tax Cost 7.75% 35% Preferred Stock 15 % 9.50% 50% Common Stock 23.00% А) 19.70% В) 17.08 % C) 14.69% D) 12.59%
Rare Minerals and Metals Inc's capital structure is briefly described below. Compute the company's weighted average...
Rare Minerals and Metals Inc's capital structure is briefly described below. Compute the company's weighted average cost of capital ("WACC"). The company's marginal income tax rate is 25%. Calculate to 4 decimal places. Capital Capital Structure Weights Pre-Tax Cost Bonds 0.35 7.80% Preferred Stock 0.15 11.75% Common Stock 0.50 25.00% 16.95% 15.12% 16.57% 16.31%
Sandpiper Inc. is estimating its weighted average cost of capital (WACC). Sandpiper’s capital structure weights on...
Sandpiper Inc. is estimating its weighted average cost of capital (WACC). Sandpiper’s capital structure weights on debt, preferred stock, and equity are 40%, 0%, and 60%, respectively. Its corporate tax rate is 30%. The expected returns required by holders of debt and equity are 6.00% and 10.50%, respectively. Compute Sandpiper’s WACC. 6.55% 7.98% 8.11% 8.25% 9.75% 10.00%
Determining the cost of Capital: Weighted Average Cost of Capital The firm's target capital structure is...
Determining the cost of Capital: Weighted Average Cost of Capital The firm's target capital structure is the mix of debt, preferred stock, and common equity the firm plans to raise funds for its future projects. The target proportions of debt, preferred stock, and common equity, along with the cost of these components, are used to calculate the firm's weighted average cost of capital (WACC). If the firm will not have to issue new common stock, then the cost of retained...
The Cost of Capital: Weighted Average Cost of Capital The firm's target capital structure is the...
The Cost of Capital: Weighted Average Cost of Capital The firm's target capital structure is the mix of debt, preferred stock, and common equity the firm plans to raise funds for its future projects. The target proportions of debt, preferred stock, and common equity, along with the cost of these components, are used to calculate the firm's weighted average cost of capital (WACC). If the firm will not have to issue new common stock, then the cost of retained earnings...
6. 6: The Cost of Capital: Weighted Average Cost of Capital The Cost of Capital: Weighted...
6. 6: The Cost of Capital: Weighted Average Cost of Capital The Cost of Capital: Weighted Average Cost of Capital The firm's target capital structure is the mix of debt, preferred stock, and common equity the firm plans to raise funds for its future projects. The target proportions of debt, preferred stock, and common equity, along with the cost of these components, are used to calculate the firm's weighted average cost of capital (WACC). If the firm will not have...
Determining the Cost of Capital: Weighted Average Cost of Capital The firm's target capital structure is...
Determining the Cost of Capital: Weighted Average Cost of Capital The firm's target capital structure is the mix of debt, preferred stock, and common equity the firm plans to raise funds for its future projects. The target proportions of debt, preferred stock, and common equity, along with the cost of these components, are used to calculate the firm's weighted average cost of capital (WACC). If the firm will not have to issue new common stock, then the cost of retained...
Weighted Average Cost of Capital The firm's target capital structure is the mix of debt, preferred...
Weighted Average Cost of Capital The firm's target capital structure is the mix of debt, preferred stock, and common equity the firm plans to raise funds for its future projects. The target proportions of debt, preferred stock, and common equity, along with the cost of these components, are used to calculate the firm's weighted average cost of capital (WACC). If the firm will not have to issue new common stock, then the cost of retained earnings is used in the...
Weighted average cost of capital
---Jeremy Publishing Company is trying to calculate its cost of capital for use in a capital budgeting decision. Mr. Mouthwash, the vice-president of finance, has given you the following information and asked you to compute the weighted average cost of capital. The company currently has outstanding a bond with an 6.0 percent coupon rate and a convertible bond with a 3.0 percent rate. The firm has been informed by its investment dealer, John Travolta, and Company, that bonds of equal risk...
Given the following information on Big Brothers, Inc. capital structure, compute the company's weighted average cost of capital (WACC). The company's marginal tax rate is 40%. Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box) Type of Capital Percent of Capital Structure Before-Tax Component Cost Bonds 31% 11.51% Preferred Stock 12% 16.39% Common Stock Please calculate it 17.67%
2. Mercer Sheetmetal Inc.'s capital structure is briefly described below. Compute the company's weighted average cost of capital ("WACC"). The company's marginal income tax rate is 35%. Сapital Bonds Percent of Capital Structure Pre-Tax Cost 7.75% 35% Preferred Stock 15 % 9.50% 50% Common Stock 23.00% А) 19.70% В) 17.08 % C) 14.69% D) 12.59%
Rare Minerals and Metals Inc's capital structure is briefly described below. Compute the company's weighted average cost of capital ("WACC"). The company's marginal income tax rate is 25%. Calculate to 4 decimal places. Capital Capital Structure Weights Pre-Tax Cost Bonds 0.35 7.80% Preferred Stock 0.15 11.75% Common Stock 0.50 25.00% 16.95% 15.12% 16.57% 16.31%
Determining the cost of Capital: Weighted Average Cost of Capital The firm's target capital structure is the mix of debt, preferred stock, and common equity the firm plans to raise funds for its future projects. The target proportions of debt, preferred stock, and common equity, along with the cost of these components, are used to calculate the firm's weighted average cost of capital (WACC). If the firm will not have to issue new common stock, then the cost of retained...
The Cost of Capital: Weighted Average Cost of Capital The firm's target capital structure is the mix of debt, preferred stock, and common equity the firm plans to raise funds for its future projects. The target proportions of debt, preferred stock, and common equity, along with the cost of these components, are used to calculate the firm's weighted average cost of capital (WACC). If the firm will not have to issue new common stock, then the cost of retained earnings...
6. 6: The Cost of Capital: Weighted Average Cost of Capital The Cost of Capital: Weighted Average Cost of Capital The firm's target capital structure is the mix of debt, preferred stock, and common equity the firm plans to raise funds for its future projects. The target proportions of debt, preferred stock, and common equity, along with the cost of these components, are used to calculate the firm's weighted average cost of capital (WACC). If the firm will not have...
Determining the Cost of Capital: Weighted Average Cost of Capital The firm's target capital structure is the mix of debt, preferred stock, and common equity the firm plans to raise funds for its future projects. The target proportions of debt, preferred stock, and common equity, along with the cost of these components, are used to calculate the firm's weighted average cost of capital (WACC). If the firm will not have to issue new common stock, then the cost of retained...
Weighted Average Cost of Capital The firm's target capital structure is the mix of debt, preferred stock, and common equity the firm plans to raise funds for its future projects. The target proportions of debt, preferred stock, and common equity, along with the cost of these components, are used to calculate the firm's weighted average cost of capital (WACC). If the firm will not have to issue new common stock, then the cost of retained earnings is used in the...
Most questions answered within 3 hours.
-
answer the questions throughout this program
public class Day implements Comparable {
Private Boolean atWork;...
asked 3 minutes ago -
This is C++ code for parking fee management program
#include <iostream>
#include <iomanip>
using namespace std;...
asked 14 minutes ago -
The free energy change for the following reaction at 25 °C, when
[Sn2+] = 1.17 M...
asked 1 hour ago -
An MNE is this kind of industry when competition in one country
is essentially independent of...
asked 3 hours ago -
. For this set of questions, determine what
proportion of a normal distribution is located betweeneach...
asked 4 hours ago -
A college student is employed as a door-to-door newspaper
salesman. Historical data suggests that the student...
asked 5 hours ago -
MATLAB HW 11 problem using Switch Case and Input commands
Write a script file that calculates...
asked 4 hours ago -
Considering gravitational time dilation, calculate the time that
passes in Earth’s surface while 1 hour passes...
asked 5 hours ago -
Minitab Problem: Take the Lake Hume June rainfall data and find
use the processes outlined in...
asked 6 hours ago -
X Company is trying to decide whether to continue using old
equipment to make Product A...
asked 6 hours ago -
IN PYTHON ONLY !! Program 2: Re-work
program #5 (WeeklyHours) from the previous assignment such that...
asked 6 hours ago -
The average length of time between arrivals at a turnpike
toll-booth is 26 seconds. What is...
asked 8 hours ago