Targeted weighted average cost of capital

Assignment Help Macroeconomics
Reference no: EM131068996

Central Systems, Inc. desires a weighted average cost of capital of 7 percent. The firm has an after-tax cost of debt of 5 percent and a cost of equity of 10 percent. What debt-equity ratio is needed for the firm to achieve its targeted weighted average cost of capital?

Reference no: EM131068996

Questions Cloud

Explain the meaning of the terms yin and yang : Explain the meaning of the terms yin and yang and discuss the role they play in Chinese religions generally. How do yin and yang (and their symbolized unity) contribute to the Chinese understanding of the universe?
Find the projects expected npv : What is the crossover rate, and what is its significance - Assume that the project has average risk. Find the project's expected NPV.
Company capital structure weights on 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 does neufelds argument challenge accepte story of german : How does Neufeld's argument challenge the accepted story of the German ‘Blitzkrieg Economy,' and How does it relate to Misa's portrayal of ‘technological innovation' during WWII?
Targeted weighted average cost of capital : Central Systems, Inc. desires a weighted average cost of capital of 7 percent. The firm has an after-tax cost of debt of 5 percent and a cost of equity of 10 percent. What debt-equity ratio is needed for the firm to achieve its targeted weighted a..
Pay for the company stock : Corporation will pay a $2.66 per share dividend next year. The company pledges to increase its dividend by 5% per year, indefinitely. If you requires a return of 10% on your investment, how much will you pay for the company's stock today?
Can absolute music communicate something to audiences : During the Romantic Era, it was common for many composers to write program music. This style of music has obvious natural expressive possibilities and intentions. However, composers also chose to create absolute music in many ways: symphonies, con..
Calculate the degrees of freedom : Which researcher is more likely to have had a larger sample size? Explain why you think so. Which researcher is more likely to have had a smaller level of alpha ( )? Explain why you think so.
Describes the results of the anova and the post hoc test : Include a written conclusion that describes the results of the ANOVA and the Post Hoc Test. Complete all work on a One Way ANOVA Worksheet

Reviews

Write a Review

 

Macroeconomics Questions & Answers

  Determine effect of the daycare program on consumption

Suppose government were to provide free daycare for children and assume this has no effect on the real wage w, taxes T, and dividend income π. Determine effect of the daycare program on consumption, leisure and hours worked by the consumer.

  Calculating the equilibrium price and quantity

Assume that demand for oranges is given by the following Equations, with quantity measured in oranges a day and price measured in dollars per orange.

  Efforts to address market failure

Discuss what has been the governmental efforts to address market failure such as monopoly power, externalities and public goods

  Calculate the arc cross or elasticity of two products

Assume that demand for product A can be expressed and demand for product B can be expressed.  Suppose the price of product B increases. What happens to the quantity demanded of both products.

  Once it is describe to be elastic or inelastic

Once it is describe to be elastic or inelastic, explain how do you come to that conclusion.

  Constant growth model with yearly compounding

Compute the 10-year growth rate forecast using the constant growth model with yearly compounding, and the constant growth model with continuous compounding for each occupation.

  Calculate the new market equilibrium and the deadweight loss

Assume a tax of t=$2 is attached to each unit exchanged in market. calculate the new market equilibrium and the deadweight loss from this change.

  To increase market share the price should be set

Your company is considering a price reduction on a product which currently sells for the price of $5.00.The price elasticity for the product is roughly equal to -2.3 over the range being considered for the price change.

  Calculate new wage and employment level in each sector

Because of the War of the Ring, the price of a sword went up to $150. Calculate new wage and employment level in each sector. (c) Do Hobbits gain or lose if the price of a sword goes up to $150? (To answer the quest..

  Williams and westrich stock is currently selling

Williams and Westrich stock is currently selling for $15.25 per share, and the dividend is expected to continue.

  Explain why a monopoly has no supply curve

Explain why in a monopolistic industry, if demand and cost curves are the same as those of a competitive industry, and if the demand curve has a negative slope and the supply curve has a positive slope, then monopoly output will be lower and price..

  Percentage point drop in its unemployment rate

Suppose that for years East Confetti's short-run Phillips Curve was such that each 1 percentage point increase in its unemployment rate was associated with a 2 percentage point decline in its inflation rate. Then, during several recent years, the ..

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