Computing the targeted weighted average cost of capital

Assignment Help Finance Basics
Reference no: EM131086404

Central Systems, Inc. desires a weighted average cost of capital of 9 percent. The firm has an after-tax cost of debt of 6 percent and a cost of equity of 12 percent. What debt-equity ratio is needed for the firm to achieve its targeted weighted average cost of capital?

Reference no: EM131086404

Questions Cloud

Identify the function of the problem behavior : Describe at least one intervention to reduce the instances of problem behavior. Identify one alternative behavior that Tracey will learn to replace the need to engage in the problem behavior.
Appropriate opportunity cost of capital : There is a 50% chance that the bond will repay its full face value and a 50% chance that the bond will default and that you will receive $700. If the appropriate opportunity cost of capital is 5%, then the price of the bond is closest to?
Structure weights on a book value basis : What are the company's capital structure weights on a book value basis? (Do not round intermediate calculations and round your answers to 4 decimal places, e.g., 32.1616.)
How decision making process related to group decision making : How is the decision making process related to group decision making in human services such as a governing board of an organization making a decision about an infraction by one of the clinicians?
Computing the targeted weighted average cost of capital : The firm has an after-tax cost of debt of 6 percent and a cost of equity of 12 percent. What debt-equity ratio is needed for the firm to achieve its targeted weighted average cost of capital?
Update the display once every second : Display the temperature on the LCD display, and update the display once every second
Required return on the company stock : Siblings, Inc., is expected to maintain a constant 6.6 percent growth rate in its dividends, indefinitely. The company has a dividend yield of 8.4 percent. What is the required return on the company's stock?
Which aligns with a basic idea in cross-cultural psychiatry : Watters presents a theory in which the spread of the modern Western approach to mental illness has which effect?
What is the required return : What is the required return? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Reviews

Write a Review

Finance Basics Questions & Answers

  Changing the face of businesses today

Describe how technology is changing the face of businesses today. Describe the most critical business processes that utilize information systems in your selected company.

  What would you expect to happen to the price of their stock

xyz corp. has 1000 shares outstanding and retained earnings of 25000 dollars. what would you expect to happen to the

  What was the firm economic value added

For 2012, Everyday Electronics reported $23 million of sales and $18 million of operating costs (including depreciation). The company has $15 million of investor-supplied operating capital.

  Estimate the tracking signal

St Louis has the following information for the students enrollment from year 2005 to 2009 please estimate the tracking signal of the St Louis forecasts. Is it over forecasted or under forecasted?

  Find the price of a call option on the stock

The annual risk-free rate is 5%. Find the price of a call option on the stock that has a strike price of $21 and that expires in 1 year. (Hint: Use daily compounding)

  Problem regarding the creation of a portfolio

The final project for this course is the creation of a portfolio. The project is divided in to four milestones, which will be submitted at various points throughout the course to scaffold learning and ensure quality final submissions. These milest..

  What type of investor might be interested in participating

If Carson issues bonds, it would be a relatively small bond offering. Should Carson consider a private placement of bonds. What type of investor might be interested in participating in a private placement

  Determine price of common stock

Spear, Corporation, has an odd dividend policy. The firm has just paid a dividend of $7 per share and has announced that it will rise the dividend by $4 per share for each of the next 4 years.

  Ways to save for the holiday season

Along with good cheer, the holidays bring so many expenses Christmas parties, travel, decorations and extra grocery costs. And all that is on top of holiday gifts!

  Financial ratios are the principal tool of financial

financial ratios are the principal tool of financial analysis. ratios standardize the financial information of firms so

  Predetermined annual price

Pivotal's Spinnaker software at a predetermined annual price of $ 450 M. Currently Netflix uses Amazon's AWS product and pays $ 400 M annually, but each year this value can go up 20% or down 10% in comparison with the previous year.

  Determine level of long-term financing

Corporation total assets fluctuate between 320K and 410K, while its fixed assets remain constant a 260K. If the company follow a maturity matching or moderate working capital financing policy,

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