Question regarding the market risk premium

Assignment Help Accounting Basics

Reference no: EM131015434

Here's some more info on a company:

Number of issuances:

Debt: 4000

Preferred Stock: 10,000

Common Stock: 200,0000

Bonds' YTM: 6% Beta: 1.2 Bond par value: $1,000

Preferred stock price: $60 Common Stock growth rate: 4% Common stock price: $45

Bond price: 104% of par Market risk premium: 12% Corporate tax rate: 35%

Preferred stock dividend: $9 Risk Free rate: 6% Bond Price: 104% of par

What is this company's WACC?

A. 10.5%

B. 13.3%

C. 15.2%

D. 17.2%

E. 18.7%

Reference no: EM131015434

Questions Cloud

Create a prototype of a stand-alone website : Design and develop a website. The idea is to provide information to tourists visiting the exhibition. The goal is to allow visitors to obtain an overview of the exhibition layout and to find details of exhibits they would like to visit.

Research the four different types of reciprocating engines : Provide research concerning which air frame used each engine

Problem regarding the market portfolio return : The company's 500,000 shares of common stock sell for $20 per share and have a beta of 1.2. The risk free rate is 4%, and the market portfolio return is 12%. Assuming a 40% tax rate, what is the company's WACC?

What aspect of this leadership style served you well in past : What type of leadership style seems a best fit for your personality? Discuss it in detail. What aspects of this leadership style served you well in the past? What are the possible pitfalls to this leadership style

Question regarding the market risk premium : Preferred stock price: $60 Common Stock growth rate: 4% Common stock price: $45 Bond price: 104% of par Market risk premium: 12% Corporate tax rate: 35% Preferred stock dividend: $9 Risk Free rate: 6% Bond Price: 104% of par

What is jason questioning of the test : Question: Jason answered a series of vocabulary and reading comprehension questions on a web site. When he finished, the site gave him a rating of intelligence. "I don't think that test really measured intelligence," thought Jason. What is Jason q..

Clearly show the primary and foreign keys for each entity : CTD needs to also record the cars that were sold by each franchisee: the type and range, the date sold and the salesperson who sold the car. Accordingly a franchisee may sell many cars of the same type and range.

Compute the breakeven point for the timing : Plan A requires a $100,000 investment now. Plan B requires an $80,000 investment now and an additional $40,000 investment at a later time. At 8% interest, compute the breakeven point for the timing of the $40,000 investment.

Calculate the horizontal velocity of the cyclist at time t : Calculate the horizontal velocity of the cyclist at time t; this is the function x'(t). What is the horizontal velocity if θ = 20o? What is the horizontal velocity if θ = 45o?

User Account

All Pages