Calculate the companys weighted average cost of capital

Assignment Help Operation Management
Reference no: EM131419247 , Length: word count:700

Wilson Corporation (not real) has a targeted capital structure of 40% long term debt and 60% common stock. The debt is yielding 6% and the corporate tax rate is 35%. The common stock is trading at $50 per share and next year's dividend is $2.50 per share that is growing by 4% per year.

Calculate the company's weighted average cost of capital. Use the dividend discount model. Show calculations in Microsoft® Word.
The company's CEO has stated if the company increases the amount of long term debt so the capital structure will be 60% debt and 40% equity, this will lower its WACC. Explain and defend why you agree or disagree. Report how would you advise the CEO.

APA 700 word analysis with 3 cited references.

Reference no: EM131419247

Questions Cloud

Risks that might be anticipated during two company merger : Name the risks that might be anticipated during a two company merger, restruturing of those changes. As a manager, what are the best ways to approach new members from the merger company that will help you ensure a smooth transition? I am the manager ..
Channel for new low-priced line of cosmetics : Discuss some forces that influence the formality of strategic management systems. Explain recording and reconciliation control in stores keeping. What factors does a cosmetics company need to consider when designing its marketing channel for a new lo..
What effect would forgoing consumption today : Using the PPC as a springboard for your analysis, what effect would forgoing consumption today in order to invest for tomorrow have on future production possibilities?
What is the longest maturity bond : What is the longest maturity bond? What is the credit rating for Georgia Pacific's bonds? Do all of the bonds have the same credit rating? Why do you think this is?
Calculate the companys weighted average cost of capital : Wilson Corporation (not real) has a targeted capital structure of 40% long term debt and 60% common stock. The debt is yielding 6% and the corporate tax rate is 35%. The common stock is trading at $50 per share and next year's dividend is $2.50 pe..
Analyze activities planned for the unit : Analyze activities planned for the unit. Include recommendations for using student collaboration and competition. Explain ways you provide a culturally responsive classroom environment.
Briefly describe the concept of waste : Briefly describe the concept of Waste as defined as Defects in the production process and Overproduction. Give one (1) example of each of these 2 types of Waste. Use the Process Improvement and Waste article attached.
Computerized sales aptitude tests and performance tests : If your organization is a call centre that hires 45 employees each month, describe how you would use application blanks, interviews, computerized sales aptitude tests and performance tests.
Are there circumstances in which a pie chart cannot be drawn : Are there circumstances in which a pie chart cannot be drawn, but a bar graph could be drawn? What are these circumstances?

Reviews

Write a Review

Operation Management Questions & Answers

  Top three reasons meetings fail-purpose of a meeting

As meetings are visible ways to demonstrate professional competence, it is best to have a reputation of being a(n) In terms of the 4 P's of effective meetings, the purpose of a meeting:  Top three reasons meetings fail: Minutes of a meeting are neces..

  Adopting a constitutional amendment

Are there any rights or liberties that you believe are not covered under the Constitution but should be? Do you think that adopting a constitutional amendment would be the best way to guarantee those rights?

  Estimate the present value

An investment will pay $100 at the end of each of the next 3 years, $200 at the end of Year 4, $300 at the end of Year 5, and $500 at the end of Year 6.

  What charge to income was disclosed in the form 8-k

Do you agree with Floyd Christianson’s argument against filing a Form 8-K? What charge to income was disclosed in the Form 8-k prepared by Susan Lohmar?

  Work at stinson shipping was getting extremely hectic

Work at Stinson Shipping was getting extremely hectic. Tom Murphy, the loading dock manager, looked over the list of shipping documents that he needed to process and marveled at the increase in business over the past three months

  Organizational strategic vision of their organizations

How are PMO project selections aligned with the organizational strategic vision of their organizations? As the new VP for your company starting a PMO, what are some of the skills and talents that you would hire into this department? Share your ration..

  Provide example of how a design of experiments

Provide an example of how a DOE (design of experiments) might be used in your place of employment and/or area of expertise. Be specific in defining the factors to be considered as well as the response variable. Also include how the response variable ..

  Explaining how the effective strategic plan was beneficial

When organizations' research and development (R&D) departments begin to strategize, they must consider numerous aspects to the process. For instance, Coulter (2013) details that functional strategies may be innovative or imitative. Prepare an analysi..

  Explain how multiple activity chart

In your own words, clearly and completely explain how a Multiple Activity Chart can be used to improve the performance of an operation.

  Analyze two major political influences of administrators

Analyze two (2) major political influences on and primary accountability areas required of program administrators after reviewing FY2012 regarding mandatory and discretionary budgets. (Title this section Budgeting Assessment.)

  Explain the concepts of search, experience

Explain the concepts of search, experience, and credence attributes (as they relate to purchasing by customers). Give an example.

  How should you decide whether to sell the product

You are an executive with a large pharmaceutical company and you have to decide whether to market a product that might have undesirable side effects for a small percentage of users. How should you decide whether to sell the product? Specifically, wha..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd