Calculate the wacc under the assumptions

Assignment Help Finance Basics
Reference no: EM131015815

Calculate the WACC under the following assumptions: long-term bonds offer a yield of 8%, stock price is $50 per share, dividend is $2/share, dividend expected to grow at a constant 6% per year, target capital structure is 75% equity and 25% debt, tax rate is 40%

 

Reference no: EM131015815

Questions Cloud

What would happen to the confidence index : Suppose Baa-rated bonds currently yield 7.5%, while Aa-rated bonds yield 5.5%. Now suppose that due to an increase in the expected inflation rate, the yields on both bonds increase by 1.0%. What would happen to the confidence index? (Round your answe..
Calculate the directional derivative of given function : Calculate the directional derivative of f in the direction of at the point (1, 2, 5) (In notation: Dv(f)(1, 2, 5)). Find a vector w such that dc(f)(1, 2, 5) has largest value. what is this largest w?
How does each branch of the government support : How does each branch of the government support each other?
The present value of an investment be the highest : Under which of the following discounting methods will the present value of an investment be the highest, assuming the same annual interest rate?
Calculate the wacc under the assumptions : Calculate the WACC under the following assumptions: long-term bonds offer a yield of 8%, stock price is $50 per share, dividend is $2/share, dividend expected to grow at a constant 6% per year, target capital structure is 75% equity and 25% debt, tax..
Calculate the dividends paid and external equity financing : ABC firm has a debt to equity ratio of 2.3 (that they wish to maintain) and new investments would cost $35 million this year. The firm expects earnings of $12 million this year.
Find the wacc for abc corp using the information : Find the WACC for ABC Corp using the information provided below.
Increase in the general level of prices : Your consulting firm will produce cash flows of $180,000 this year, and you expect cash flow to keep pace with any increase in the general level of prices. The interest rate currently is 5.4%, and you anticipate inflation of about 1.4%.
Measured by the standard deviation of returns : Measured by the standard deviation of returns, by how much would your uncle's risk have been reduced if he had held a portfolio consisting of 60% in ECB and the remainder in WCB?

Reviews

Write a Review

Finance Basics Questions & Answers

  Organizational theory and design-after mergers and growth

Organizations merge and grow bigger and differentiate, which can cause problems in functional structure.

  Te annual payment under the lease will be 2500 with

schaad corporation has entered into a 8 year lease for a piece of equipment. the annual payment under the lease will

  Find what is the initial investment outlay

The tax rate is 40%. What is the initial investment outlay? Round your answer to the nearest cent.

  You are considering purchasing shares in a mutual fund in

you are considering purchasing shares in a mutual fund. in detail what are three advantages and three disadvantages of

  The bank included a credit memorandum for 1260 which

portland boat limiteds bank statement for the month of november showed a balance per bank of 7000. the companys cash

  An investor in the 35 percent tax bracket may purchase a

an investor in the 35 percent tax bracket may purchase a corporate bond that is rated double a and is traded on the new

  Introducing a new surface cleaning machine

Applied Nanotech is thinking about introducing a new surface cleaning machine. The marketing department has come up with the estimate that Applied Nanotech can sell 15 units per year at $305,000 net cash flow per unit for the next five years. The eng..

  The manager of sensible essentials conducted an excellent

the manager of sensible essentials conducted an excellent seminar explaining debt and equity financing and how firms

  Kim sundaram recently bought a 20-year zero coupon bond

kim sundaram recently bought a 20-year zero coupon bond that compounds interest semiannually. if the current market

  Discuss basic features of mutual funds

Discuss and explain the basic features of mutual funds, and note what they have to offer as in-vestment vehicles.

  Assuming the following ratios are constantm what is the

assuming the following ratios are constantm what is the sustainable growth rate?total asset turnover 1.90profit margin

  How much will luis have in his account at the time

If the new account earns interest at the rate of 8%/year compounded quarterly, how much will Luis have in his account at the time of his retirement?

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