Question
What is the weighted average cost of capital of a company that has debt of $8.505...
What is the weighted average cost of capital of a company that has debt of $8.505 million and equity of $11.143 million? The average before-tax cost of debt is 7.30% per annum and the average cost of equity is 10.10% per annum. The company tax rate is 30%. Please use three methods – a mathematical formula, SUMPRODUCT function and SUM array function, to compute the weighted average cost of capital.
Homework Answers
Answer #1
Not the answer you're looking for?
Similar Questions
Dickson, Inc., has a debt-equity ratio of 2.35. The firm's weighted average cost of capital is...
Dickson, Inc., has a debt-equity ratio of 2.35. The firm's
weighted average cost of capital is 12 percent and its pretax cost
of debt is 9 percent. The tax rate is 24 percent.
What is the company's cost of equity capital?
What is the unlevered cost of equity capital?
What would the company's weighted average cost of capital be if
the company's debt-equity ratio were .75 and 1.35?
Please answer this in Excel, thank you
Bounds on the Weighted Average Cost of Capital. The firm is financed by 30% of debt...
Bounds on the Weighted Average Cost of Capital. The firm is
financed by 30% of debt and 70% of equity. The corporate tax rate
is 35%. The firm pays 2% interest rate on its debt to investors.
The risk-free rate in the economy is also 2% and the firm equity
has beta of 2.5.
a) What is the lower bound for the firm’s weighted average cost
of capital?
b) What is the upper bound for the firm’s weighted average cost...
Company has a FCFF of $45.5 million. The weighted average cost of capital is 12% and...
Company has a FCFF of $45.5 million. The weighted average cost
of capital is 12% and its required rate of return for equity is 8%.
FCFF is expected to grow forever at 6% per year. Company has debt
outstanding of $100 million. a) What is the total value of the
equity? b) What is the value per share if company has 15 million
shares outstanding?
The following data pertain to Dana Industries: Interest rate on debt capital: 9% Cost of equity...
The following data pertain to Dana Industries:
Interest rate on debt capital: 9%
Cost of equity capital: 12%
Before-tax operating income: P35 million
Market value of debt capital: P60 million
Market value of equity capital: P120 million
Total assets: P150 million
Income tax rate: 30%
Total current liabilities: P15 million
Required:
Compute Dana’s weighted-average cost of capital.
Compute Dana’s economic value added.
A company’s weighted average cost of capital is 12.1% per year and the market value of...
A company’s weighted average cost of capital is 12.1% per year
and the market value of its debt is $70.1 million. The company’s
free cash flow last year was $12.3 million and it is expected to
grow 30% per year for the next three years. Thereafter, the free
cash flow is expected to grow forever at a rate of 6.7% per year.
If the company has six million shares of common stock outstanding,
what is the value per share?
Please...
(Weighted average cost of capital) The target capital structure for QM Industries is 45 percent common...
(Weighted average cost of capital) The target capital structure
for QM Industries is
45 percent common stock, 6percent preferred stock, and
49percent debt. If the cost of common equity for the firm is 17.1
percent, the cost of preferred stock is10.5
percent, the before-tax cost of debt is 8.1 percent, and the
firm's tax rate is 35
percent, what is QM's weighted average cost of capital?
QM's weighted average cost of capital is
nothing%.
(Round to three decimal places.)
AVERAGE COST OF CAPITAL 17. Given the following data, compute the weighted average cost of capital...
AVERAGE COST OF CAPITAL
17. Given the following data, compute the weighted average cost
of capital (WACC).
Components of capital
structure
After Tax Cost
Debt
$65
million
6.5%
Preferred Stock 35
million
10.5%
Common Equity 60
million
12.75%
Total
160 million
If the return on assets of the
corporation is 13% on an annual basis, calculate its profitability
and economic value added, EVA.
18. Provide an explanation or the rationale for the cost of
capital (average or overall...
Solve for the weighted average cost of capital. 13.60% = cost of equity capital for a...
Solve for the weighted average cost of capital.
13.60% = cost of equity capital for a leveraged firm
3/4 = debt-to-total-market-value ratio
8.0% = before-tax borrowing cost
21.0% = marginal corporate income tax rate
Weighted Average Cost of Capital (WACC) 1 In its 2017 10-k Black Diamond Equipment reported the...
Weighted Average Cost of
Capital (WACC)
1
In its 2017 10-k
Black Diamond Equipment reported the following information about
its capital structure. The firm had long term public debt
outstanding of 500 million dollars and short term debt of 31.5
million dollars. It's average cost of debt was 8.25%. The firm had
10 million public shares outstanding and each share was currently
trading for $84.75. It's cost of equity was 15.6%. The firms
current marginal tax rate was 35%. What...
Once Bitten Corp. uses no debt (it is "unleveraged"). The weighted average cost of capital is...
Once Bitten Corp. uses no debt (it is "unleveraged"). The
weighted average cost of capital is 10 percent. If the current
market value of the equity is $14 million and there are no taxes,
what is EBIT? Note: Use the "M&M proposition I formula with
taxes" and enter a 0 for the tax rate and a $0 for debt. Then solve
for the EBIT. Use the WACC here as a measure of the unleveraged
cost of capital RU. (Do not...
ADVERTISEMENT
Need Online Homework Help?
Get Answers For Free
Most questions answered within 1 hours.
ADVERTISEMENT
Active Questions
asked 6 minutes ago
asked 6 minutes ago
asked 41 minutes ago
asked 44 minutes ago
asked 49 minutes ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 2 hours ago