Use the following information to answer questions 15–20
The existing capital structure of Leeds (Ltd) is...
Use the following information to answer questions 15–20
The existing capital structure of Leeds (Ltd) is as follows:
Notes:
The ordinary shares are currently trading at R46,45. A
dividend of 80 cents per share has just been paid and the directors
estimate that the dividends will increase by 8% each year in
perpetuity.
Preference shares are trading at R2,75 and have a par value of
R2,40.
The debentures have a par value of R50 and are currently...
1.) The shareholders’ equity of Windy Company on December 31,
2010, consists of the following capital...
1.) The shareholders’ equity of Windy Company on December 31,
2010, consists of the following capital balances:
Preference share capital, 10% cumulative, 3 years in arrears,
P100 par, P110 liquidation price 150,000 shares
P15,000,000
Ordinary share capital, P100 par, 200,000 shares
20,000,000
Subscribed ordinary share capital, net of subscription
receivable of P4,000,000
6,000,000
Treasury shares-ordinary, 50,000 shares at cost
4,000,000
Share premium
3,000,000
Retained earnings
20,000,000
The book value per share of ordinary is
a. 156 b.
286.67 c....
Consider a company with the following capital structure: The
company’s 40,000 bonds are selling at 80%...
Consider a company with the following capital structure: The
company’s 40,000 bonds are selling at 80% of $10,000 face value per
bond, while 80 million common shares are selling at $5.50 per share
and 160,000 preferred shares are selling at $250 per share. The
company’s bonds are priced to yield 6%. Using the single-factor
model, the company’s equity beta is estimated to be 1.6. And the
company’s preferred shares are committed to pay $20 annual dividend
per share indefinitely. The...
The capital structure of company KL is given below:
Sources of
capital Book value ($...
The capital structure of company KL is given below:
Sources of
capital Book value ($ 000)
L.T.Debts
60,000
Preferred stock
10,000
Common stock
20,000
Reserves(re)
40,000
Total
capital
130,000
The interest rate charged to the long term debt is 10%. Face
value of company’s common stock is $1 per share and currently are
trading for $8 and dividend for common stock is $1.2...
The capital structure of company KL is given below:
Sources of capital Book value ($ 000)...
The capital structure of company KL is given below:
Sources of capital Book value ($ 000)
L.T.Debts 60,000
Preferred stock 10,000
Common stock 20,000
Reserves(re) 40,000
Total capital 130,000
The interest rate charged to the long term debt is 10%. Face
value of company’s common stock is $1 per share and currently are
trading for $8 and dividend for common stock is $1.2 per share.
Price of preferred stock is $10 per share and dividend for
preferred stock is $1.5...
The capital structure of company KL is given below: Sources of
capital Book value ($ 000)...
The capital structure of company KL is given below: Sources of
capital Book value ($ 000) L.T.Debts 60,000 Preferred stock 10,000
Common stock 20,000 Reserves(re) 40,000 Total capital 130,000 The
interest rate charged to the long term debt is 10%. Face value of
company’s common stock is $1 per share and currently are trading
for $8 and dividend for common stock is $1.2 per share. Price of
preferred stock is $10 per share and dividend for preferred stock
is $1.5...
Delta Corporation has the following capital structure:
Cost
(aftertax)
Weights
Weighted
Cost
Debt
(Kd)
6.2...
Delta Corporation has the following capital structure:
Cost
(aftertax)
Weights
Weighted
Cost
Debt
(Kd)
6.2
%
25
%
1.55
%
Preferred stock
(Kp)
5.5
25
1.38
Common equity
(Ke) (retained earnings)
15.5
50
7.75
Weighted average cost of capital
(Ka)
10.68
%
a. If the firm has $22 million in retained
earnings, at what size capital structure will the firm run out of
retained earnings? (Enter your answer in millions of
dollars (e.g., $10 million should be entered as...
Delta Corporation has the following capital structure:
Cost
(aftertax)
Weights
Weighted
Cost
Debt (Kd)
10.1
%...
Delta Corporation has the following capital structure:
Cost
(aftertax)
Weights
Weighted
Cost
Debt (Kd)
10.1
%
20
%
2.02
%
Preferred stock (Kp)
11.2
15
1.68
Common equity (Ke) (retained
earnings)
8.1
65
5.27
Weighted average cost of capital
(Ka)
8.97
%
a. If the firm has $39 million in retained
earnings, at what size capital structure will the firm run out of
retained earnings? (Enter your answer in millions of
dollars (e.g., $10 million should be entered as "10").)...
Delta Corporation has the following capital structure: Cost
(aftertax) Weights Weighted Cost Debt (Kd) 5.5 %...
Delta Corporation has the following capital structure: Cost
(aftertax) Weights Weighted Cost Debt (Kd) 5.5 % 25 % 1.38 %
Preferred stock (Kp) 10.5 25 2.63 Common equity (Ke) (retained
earnings) 10.5 50 5.25 Weighted average cost of capital (Ka) 9.25
%
a. If the firm has $26 million in retained earnings, at what
size capital structure will the firm run out of retained earnings?
(Enter your answer in millions of dollars (e.g., $10 million should
be entered as "10").)...
Given the following information: Percent of capital
structure:
Preferred
stock
20
%
Common
equity
40
Debt...
Given the following information: Percent of capital
structure:
Preferred
stock
20
%
Common
equity
40
Debt
40
Additional information:
Corporate tax
rate
34
%
Dividend,
preferred
$
8.50
Dividend,
expected common
$
2.50
Price,
preferred
$
105.00
Growth rate
7
%
Bond yield
9.5
%
Flotation cost,
preferred
$
3.60
Price,
common
$
75.00
Calculate the weighted average cost of capital for Digital
Processing Inc. (Do not round intermediate calculations.
Input your answers as a percent rounded to 2 decimal...