Question

Easy Car Corp. is a grocery store located in the Southwest. It paid an annual dividend...

Easy Car Corp. is a grocery store located in the Southwest. It paid an annual dividend of ​$2.00 last year to its shareholders and plans to increase the dividend annually at the rate of 5.0​%. It currently has 2,000,000 common shares outstanding. The shares currently sell for ​$17 each. Five years ago, Easy Car Corp. issued 30,000 semiannual 22-year bonds with a coupon rate of 8​% and a par value of ​$1,000. The bonds currently have a yield to maturity​ (YTM) of 8%. What is the weighted average cost of capital (WACC) for Easy Car Corp. if the corporate tax rate is 20%?

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
Easy Car Corp. is a grocery store located in the Southwest. It plans to pay an...
Easy Car Corp. is a grocery store located in the Southwest. It plans to pay an annual dividend of ​$4.00 next year to its shareholders and plans to increase the dividend annually at the rate of 2.0​%. It currently has 1,000,000 common shares outstanding. The shares currently sell for ​$16 each. Easy Car Corp. also has 30,000 semiannual bonds outstanding with a coupon rate of 7​%, a maturity of 28 ​years, and a par value of ​$1,000. The bonds currently...
Easy Car Corp. is a grocery store located in the Southwest. It expects to pay an...
Easy Car Corp. is a grocery store located in the Southwest. It expects to pay an annual dividend of ?$6.30 next year to its shareholders and plans to increase the dividend annually at the rate of 5.0?% forever. It currently has 600,000 common shares outstanding. The shares currently sell for ?$60 each. Easy Car Corp. also has 20,000 semiannual bonds outstanding with a coupon rate of 8.9141?%, a maturity of 26 ?years, and a par value of ?$1,000. The bonds...
Comida corp. is a grocery store located in the midwest. It paid an annual dividend of...
Comida corp. is a grocery store located in the midwest. It paid an annual dividend of ​$2.00 last year to its shareholders and plans to increase the dividend annually at 2.0% forever. It has 500,000 shares outstanding. The shares currently sell for ​$23 per share. Comida Corp. has 10,000 semiannual bonds outstanding with a coupon rate of 8%, a maturity of 18 ​years, and a par value of $1,000. The bonds currently have a yield to maturity​ (YTM) of 6​%...
Hollydale's is a clothing store in East Park. It paid an annual dividend of ​$2.20 last...
Hollydale's is a clothing store in East Park. It paid an annual dividend of ​$2.20 last year to its shareholders and plans to increase the dividend annually at 2.0​%. It has 500,000 shares outstanding. The shares currently sell for ​$27.89 per share. ​ Hollydale's has 10,000 semiannual bonds outstanding with a coupon rate of 11​%, a maturity of 24 ​years, and a par value of ​$1,000. The bonds are currently selling for ​$1,543.17 per bond. What is the adjusted WACC...
TinTan Inc. is a appliance manufacturer in the USA. The company currently has 2,000,000 common shares...
TinTan Inc. is a appliance manufacturer in the USA. The company currently has 2,000,000 common shares outstanding. The shares currently sell for ​$11 each. The company paid an annual dividend of ​$4.00 last year to its shareholders and plans to increase the dividend annually at the rate of 5.0​%. TinTan Inc. also has 10,000 semiannual bonds outstanding with a coupon rate of 6​%, a maturity of 28 ​years, and a par value of ​$1,000. The bonds currently have a yield...
TinTan Inc. is a appliance manufacturer in the USA. The company currently has 2,000,000 common shares...
TinTan Inc. is a appliance manufacturer in the USA. The company currently has 2,000,000 common shares outstanding. The shares currently sell for ​$12 each. The company paid an annual dividend of ​$3.00 last year to its shareholders and plans to increase the dividend annually at the rate of 4.0​%. TinTan Inc. also has 20,000 semiannual bonds outstanding with a coupon rate of 10​%, a maturity of 25 ​years, and a par value of ​$1,000. The bonds currently have a yield...
The company has 500,000 shares. The dividend to be paid after one year is expected to...
The company has 500,000 shares. The dividend to be paid after one year is expected to be EUR 1.5 per share, after which the dividend is expected to increase by 3% per year. Investors' return requirement per share is 13%. In addition, the company has issued a bond with a maturity of four years. The bond has a nominal value of EUR 3 million and a coupon rate of 8%. The Netherlands government risk-free bonds, on the other hand, currently...
1. West Corp. issued 15-year bonds two years ago at a coupon rate of 8.2 percent....
1. West Corp. issued 15-year bonds two years ago at a coupon rate of 8.2 percent. The bonds make semiannual payments. If these bonds currently sell for 103 percent of par value, what is the YTM? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) YTM = % 2. Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments....
Erna Corp. has 9 million shares of common stock outstanding. The current share price is $88,...
Erna Corp. has 9 million shares of common stock outstanding. The current share price is $88, and the book value per share is $7. Erna Corp. also has two bond issues outstanding. The first bond issue has a face value of $80 million, has a coupon rate of 5 percent, and sells for 98 percent of par. The second issue has a face value of $55 million, has a coupon rate of 6 percent, and sells for 106 percent of...
5.   Static Electric Co. currently pays a $2.10 annual cash dividend (D0). It plans to maintain the...
5.   Static Electric Co. currently pays a $2.10 annual cash dividend (D0). It plans to maintain the dividend at this level for the foreseeable future as no future growth is anticipated. If the required rate of return by common stockholders (Ke) is 12 percent, what is the price of the common stock?        6.   The coupon rate on a debt issue is 6%. If the yield to maturity on the debt is 9%, what is the after-tax cost of debt if the...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT