Question

) Hankins Corporation has 8 million shares of common stock outstanding, 920,000 shares of preferred stock...

  1. ) Hankins Corporation has 8 million shares of common stock outstanding, 920,000 shares of preferred stock outstanding, and 180,000 of 5.5 percent semiannual bonds outstanding, par value $1,000 each. The annual dividend for the preferred stocks is $4.8 per share. The common stock currently sells for $39 per share and has a beta of 1.26, the preferred stock currently sells for $80 per share, and the bonds have 25 years to maturity and sell for 98 percent of par. The expected return on market is 9.6% and the T-bills are yielding 2.8 percent, and the firm's tax rate is 34 percent.
  1. What is the firm's market value capital structure?
  2. If the firm is evaluating a new investment project that has the same risk as the firm's typical project, what rate should the firm use to discount the project's cash flows?

Note: Must show work

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Hankins Corporation has 8.8 million shares of common stock outstanding, 630,000 shares of 7.3 percent preferred...
Hankins Corporation has 8.8 million shares of common stock outstanding, 630,000 shares of 7.3 percent preferred stock outstanding, and 188,000 of 8.5 percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $65.30 per share and has a beta of 1.33, the preferred stock currently sells for $106.70 per share, and the bonds have 14 years to maturity and sell for 89.5 percent of par. The market risk premium is 6.95 percent, T-bills are yielding 5.65...
Hankins Corporation has 8.4 million shares of common stock outstanding, 590,000 shares of 7.4 percent preferred...
Hankins Corporation has 8.4 million shares of common stock outstanding, 590,000 shares of 7.4 percent preferred stock outstanding, and 184,000 of 8.6 percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $64.90 per share and has a beta of 1.29, the preferred stock currently sells for $107.10 per share, and the bonds have 13 years to maturity and sell for 91.5 percent of par. The market risk premium is 7 percent, T-bills are yielding 5.7...
Twitter Corporation has 13 million shares of common stock outstanding, 900,000 shares of 9 percent preferred...
Twitter Corporation has 13 million shares of common stock outstanding, 900,000 shares of 9 percent preferred stock outstanding and 250,000 ten percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for Rs 34 per share and has a beta of 1.15, the preferred stock currently sells for Rs. 80 per share, and the cost of bonds is 11.20%. The market risk premium is 11.5 percent, T-bills are yielding 7.5 percent, and the firm's tax rate is...
Hankins Corporation has 7.9 million shares of common stock outstanding, 540,000 shares of 7.4 percent preferred...
Hankins Corporation has 7.9 million shares of common stock outstanding, 540,000 shares of 7.4 percent preferred stock outstanding, and 179,000 of 8.6 percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $64.40 per share and has a beta of 1.24, the preferred stock has a par value of $100 and currently sells for $107.60 per share, and the bonds have 13 years to maturity and sell for 94 percent of par. The market risk premium...
Hankins Corporation has 6.4 million shares of common stock outstanding, 225,000 shares of 3.7 percent preferred...
Hankins Corporation has 6.4 million shares of common stock outstanding, 225,000 shares of 3.7 percent preferred stock outstanding, par value of $100; and 110,000 bonds with a semiannual coupon rate of 5.4 percent outstanding, par value $1,000 each. The common stock currently sells for $72 per share and has a beta of 1.20, the preferred stock has a par value of $100 and currently sells for $84 per share, and the bonds have 18 years to maturity and sell for...
Calculating WACC Hankins Corporation has 8.4 million shares of common stock outstanding, 590,000 shares of 7.4...
Calculating WACC Hankins Corporation has 8.4 million shares of common stock outstanding, 590,000 shares of 7.4 percent preferred stock outstanding, and 184,000 of 8.6 percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $64.90 per share and has a beta of 1.29, the preferred stock currently sells for $107.10 per share, and the bonds have 13 years to maturity and sell for 91.5 percent of par. The market risk premium is 7 percent, T-bills are...
Organic Produce Corporation has 7.5 million shares of common stock outstanding, 500,000 shares of 7% preferred...
Organic Produce Corporation has 7.5 million shares of common stock outstanding, 500,000 shares of 7% preferred stock outstanding, and 175,000 of 8.2% semiannual bonds outstanding, par value of $1,000 each. The common stock currently sells for $64 per share and has a beta of 1.2, the preferred stock currently sells for $108 per share, and the bonds have 15 years to maturity and sell for 96% of par. The market risk premium is 6.8%, T-Bills are yielding 5.5%, and the...
Titan Mining Corporation has 8.6 million shares of common stock outstanding, 300,000 shares of preferred stock...
Titan Mining Corporation has 8.6 million shares of common stock outstanding, 300,000 shares of preferred stock outstanding, and 160,000 bonds outstanding with a par value of $1,000 each. The common stock currently sells for $34 per share and has a beta of 1.30, the preferred stock currently sells for $84 per share, and the bonds sell for 115 percent of par. The cost of common equity is 12.62 percent, preferred equity is 5.95 percent, and the debt's yield to maturity...
Finding the WACC Titan Mining Corporation has 6.4 million shares of common stock outstanding and 175,000...
Finding the WACC Titan Mining Corporation has 6.4 million shares of common stock outstanding and 175,000 6.2 percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $53 per share and has a beta of 1.15; the bonds have 25 years to maturity and sell for 106 percent of par. The market risk premium is 6.8 percent, T-bills are yielding 3.1 percent, and the company's tax rate is 22 percent. a. What is the firm's market...
Raymond Mining Corporation has 8.4 million shares of common stock outstanding, 280,000 shares of 6 percent...
Raymond Mining Corporation has 8.4 million shares of common stock outstanding, 280,000 shares of 6 percent $100 par value preferred stock outstanding, and 141,000 7.50 percent semiannual bonds outstanding, par value $1,000 each. The common stock currently sells for $32 per share and has a beta of 1.20, the preferred stock currently sells for $94 per share, and the bonds have 20 years to maturity and sell for 113 percent of par. The market risk premium is 7.2 percent, T-bills...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT