Question

if burke software were unlevered. it beta would be 1.1. The company has D/E ratio equal...

if burke software were unlevered. it beta would be 1.1. The company has D/E ratio equal to 0.40 and it cost of debt is 9.28%. The riskfree rate is 7% and the market return is 28%. the tax rate is 28%. find waac
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
If it were unlevered, the overall firm beta for Wild Widgets Inc. (WWI) would be 1.1....
If it were unlevered, the overall firm beta for Wild Widgets Inc. (WWI) would be 1.1. WWI has a target debt/equity ratio of 1. The expected return on the market is 0.18, and Treasury bills are currently selling to yield 0.07. WWI one-year bonds (with a face value of $1,000) carry an annual coupon of 12% and are selling for $971.92. The corporate tax rate is 40%.(Round your answers to 2 decimal places before the percentage sign. (e.g., 10.23%)) a....
Company A has an unlevered beta equal to 1.2. The company has a debt equal to...
Company A has an unlevered beta equal to 1.2. The company has a debt equal to $20,000,000 and a levered beta equal to 1.9. Assume we have perfect competitive markets and there is no taxation. If the risk free rate is 2.00% and the expected return of the market portfolio is 6.00%, what is the company’s wacc? A. 6.80% B. 7.27% C. 8.00% D. 9.60% ANSWER IS 6.80% PLEASE DO NOT ANSWER UNLESS ARRIVE AT THIS, THANK YOU.
Ford Motor Company is considering an investment in a software company in India. Since the software...
Ford Motor Company is considering an investment in a software company in India. Since the software company is not of the same risk as Ford, Ford has found a similar software company in India to use as a proxy. The proxy firm’s levered beta is 1.4, its D/E ratio is 40%, and the proxy firm’s marginal tax rate is 30%. The U.S. risk-free rate is 2% and the expected return on the market is 8%. Ford Motor Company’s (unlevered) beta...
If it were unlevered, the overall firm beta for Wild Widgets Inc. (WWI) would be 1.4....
If it were unlevered, the overall firm beta for Wild Widgets Inc. (WWI) would be 1.4. WWI has a target debt/equity ratio of 2. The expected return on the market is 0.08, and Treasury bills are currently selling to yield 0.03. WWI one-year bonds (with a face value of $1,000) carry an annual coupon of 10% and are selling for $934.8. The corporate tax rate is 36%.(Round your answers to 2 decimal places before the percentage sign. (e.g., 10.23%)) a....
If it were unlevered, the overall firm beta for Wild Widgets Inc. (WWI) would be 1.3....
If it were unlevered, the overall firm beta for Wild Widgets Inc. (WWI) would be 1.3. WWI has a target debt/equity ratio of 0.4. The expected return on the market is 0.17, and Treasury bills are currently selling to yield 0.05. WWI one-year bonds (with a face value of $1,000) carry an annual coupon of 6% and are selling for $911.6. The corporate tax rate is 30%.(Round your answers to 2 decimal places before the percentage sign. (e.g., 10.23%)) a....
A company currently has a debt to total assets ratio of 35% and the beta of...
A company currently has a debt to total assets ratio of 35% and the beta of the company is 1.05. The company has a current cost of debt of 7.8% and a tax rate of 38%. The current risk-free rate is 4.5% and the market risk premium (the difference between the return on the market and the risk-free rate of return) is 4%. Companies with similar risk characteristics and 40% debt can borrow at 9.5%. Would the company lower its...
WACC Comparables - 2 If it were unlevered, the overall firm beta for Wild Widgets Inc....
WACC Comparables - 2 If it were unlevered, the overall firm beta for Wild Widgets Inc. (WWI) would be 1.6. WWI has a target debt/equity ratio of 1. The expected return on the market is 0.11, and Treasury bills are currently selling to yield 0.05. WWI one-year bonds (with a face value of $1,000) carry an annual coupon of 12% and are selling for $944.08. The corporate tax rate is 35%.(Round your answers to 2 decimal places before the percentage...
Beale Manufacturing Company has a beta of 1.1, and Foley Industries has a beta of 0.40....
Beale Manufacturing Company has a beta of 1.1, and Foley Industries has a beta of 0.40. The required return on an index fund that holds the entire stock market is 11%. The risk-free rate of interest is 3.5%. By how much does Beale's required return exceed Foley's required return? Do not round intermediate calculations. Round your answer to two decimal places.
Problem 15-03 Premium for Financial Risk Ethier Enterprise has an unlevered beta of 1.1. Ethier is...
Problem 15-03 Premium for Financial Risk Ethier Enterprise has an unlevered beta of 1.1. Ethier is financed with 40% debt and has a levered beta of 1.2. If the risk free rate is 6% and the market risk premium is 6%, how much is the additional premium that Ethier's shareholders require to be compensated for financial risk? Round your answer to two decimal places.
AFM Co. has a market value-based D/V ratio of 1/3. The expected return on the company’s...
AFM Co. has a market value-based D/V ratio of 1/3. The expected return on the company’s unlevered equity is 20%, and the pretax cost of debt is 10%. Sales for the company are expected to remain stable indefinitely at $25 million. Costs amount to 60% of sales. The corporate tax rate is 30%, and the company distributes all its earnings as dividends at the end of each year. The company’s debt policy is to maintain a constant market value-based D/V...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT