Question

Skynet has equity with a market value of $1.2 billion and debt with a value of $600 million. Skynet’s ROA is 12% and its cost of debt is 7%. What is Skynet’s Return on Equity? Assume Skynet’s tax rate is 28%.

Answer #1

The market value of Fords' equity, preferred stock, and debt
are $ 7 billion, $ 3 billion, and $ 11 billion, respectively.
Ford has a beta of 1.4, the market risk premium is 8%, and the
risk-free rate of interest is 4%. Ford's preferred stock pays a
dividend of $ 3 each year and trades at a price of $ 28 per share.
Ford's debt trades with a yield to maturity of 7.5%.
What is Ford's weighted average...

Assume the market
value of a firm's preferred stock, equity, and debt are$2 billion,
$6 billion, and $13 billion, respectively. The firm has a beta of
1.7, the market return is 11%, and the risk-free rate of interest
is 3%. The firm's preferred stock pays a dividend of $4 each year
and trades at a price of $30 per share. The firm's debt trades with
a yield to maturity of 8.0%. What is the firm's weighted average
cost of capital...

Assume the market value of Fords' equity, preferred stock and
debt are $7 billion, $4 billion and $10 billion respectively. Ford
has a beta of 1.4, the market risk premium is 6% and the risk-free
rate of interest is 4%. Ford's preferred stock pays a dividend of
$3 each year and trades at a price of $25 per share. Ford's debt
trades with a yield to maturity of 8.5%. What is Ford's weighted
average cost of capital if its tax...

Assume the market value of Fords' ordinary equity, preference
share, and debt are $6 billion, $2 billion, and $13 billion,
respectively. Ford’s equity has a beta of 1.7, the market risk
premium is 8%, and the risk-free rate of interest is 3%. Ford's
preference share pays a dividend of $4 each year and trades at a
price of $30 per share. Ford's debt trades with a yield to maturity
of 8.0%. What is Ford's weighted average cost of capital if...

The market value of Fords' equity, preferred stock, and debt
are
$ 8$8
billion,
$ 1$1
billion, and
$ 15$15
billion, respectively. Ford has a beta of
1.31.3,
the market risk premium is
88%,
and the risk-free rate of interest is
44%.
Ford's preferred stock pays a dividend of
$ 3$3
each year and trades at a price of
$ 28$28
per share. Ford's debt trades with a yield to maturity of
8.58.5%.
What is Ford's weighted average...

The market value of Ford’s debt, preferred stock and equity are
$1.5 billion, $1 billion, and $6 billion, respectively. Ford has a
beta of 1.5, the market risk premium is 8%, and the risk-free rate
of interest is 4%. Ford’s preferred stock pays a dividend of $3.50
each year and trades at a price of $30 per share. Ford’s debt
trades with a yield to maturity of 9.5%. What is Ford’s WACC if its
tax rate is 21%?
13.27%
13.99%...

A firm you have been asked to analyze has $250 million in market
value of debt outstanding and $750 million in equity outstanding.
The debt has a Beta of 0.1 and equity has a Beta of 1.2. Assume the
risk-free rate is 1% and the market premium is 7%. Assume
the coupon on the debt is equal to its yield. Also assume the firm
faces a 21% marginal tax rate. Which of the following describes the
firm's WACC?

A company has a market value of equity of $599 million and a
market value of debt of $400 million. What is the company's WACC
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its pre-tax cost of debt is 5.6% and the corporate tax rate is
30%?

A firm's assets have a beta of 0.60. The market value of the
firm's equity is $1.2 billion and the market value of the firm's
debt is $900 million. If the corporate tax rate = 0, what is the
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A company has equity beta 0.8 and market value of equity $350
million. The yield to maturity on this company’s debt is 8.4%. The
market value of that debt is $250 million. The risk-free rate is 4%
and the expected return on the market is 12%; the tax rate of this
company is 40%. What is the WACC?

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