What is the company equity weight

Assignment Help Financial Management
Reference no: EM131355083

BigSky, Inc., has 7.1 million shares of common stock outstanding. Current share price is $62.10, and the book value per share is $5.10. The company also has two bond issues outstanding. The first bond issue has a face value of $71.1 million, a coupon rate of 7.1 percent, and sells for 92.5 percent of par. The second issue has a face value of $36.1 million, a coupon rate of 7.6 percent, and sells for 91.5 percent of par. The first issue matures in 21 years, the second in 13 years. The most recent dividend was $3.40 and the dividend growth rate is 7 percent. Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is 34 percent.

What is the company’s cost of equity

What is the company’s aftertax cost of debt

What is the company’s equity weight

What is the company’s weight of debt

What is the company’s WACC

Reference no: EM131355083

Questions Cloud

Total reserves in the banking system : Total reserves in the banking system is $120 billion none of which are excess. People hold only deposits and no currency, and the reserve requirement is 8%. If the Fed reduces the reserve requirement to 6% and at the same time sells $35 billion wo..
Evaluate the impact of the theory and contribution : Prior to beginning work on this discussion, read the required chapters from the Harré (2006) Key Thinkers in Psychology e-book. Examine one of the schools of thought (psychoanalysis, behaviorism, etc.) presented in the reading that is significant ..
What will be the final pressure : A block of copper at a pressure of 1 atm (approximately 100 kPa) and a temperature of 5°C is kept at constant volume. If the temperature is raised to 10°C, what will be the final pressure?
What is the real rate of return : Suppose the money supply grew at an average annual rate of 3%, velocity decreased by 5%, the nominal interest rate averaged 9%, and output grew at an average annual rate of 5%. According to the Quantity Theory, what is the real rate of return?
What is the company equity weight : BigSky, Inc., has 7.1 million shares of common stock outstanding. Current share price is $62.10, and the book value per share is $5.10. The company also has two bond issues outstanding. What is the company’s cost of equity. What is the company’s afte..
Calculate the volume expansivity : The equilibrium states of superheated steam are represented by Callendar's equation, thus:- Calculate the volume expansivity ß as a function of T and P.
Find the magnitude of the initial acceleration : Find the magnitude of the initial acceleration of the masses as seen from the cabin and the tension in the string.
Article from the news of the past week : Select an article from the news of the past week that illustrates one or two of the concepts that are discussed in chapters 1 and 2. In a paper of no more than two pages (double spaced, one inch margins, 12 point type) briefly summarize the artic..
What is the third variable : Post an abstract of either a correlational study or an experiment. Ask the class to indicate which method it is. Give the reason why you think those who respond are either correct or incorrect.What is the third variable? Give an example of how ..

Reviews

Write a Review

 

Financial Management Questions & Answers

  Firms use more debt in capital structure than other firms

It can be difficult to accurately forecast a project's cash flows because many risk factors may be present. As an analyst, what will you do to increase the accuracy of the project's cash flow forecasts? Some firms use more debt in their capital struc..

  Calculate economic order quantity

Cheese burger and Taco Company purchases 18,458 boxes of cheese each year. It cost $25 to place and ship each order and 3.67 per year for each box held as inventory. The company uses Economic order quantity modelling placing the orders. Calculate eco..

  Analysis on the projected return on investment

Develop a 3-5 page analysis on the projected return on investment for my college education and projected future employment. part 1 - describe how an why I made the decision to pursue an MBA,include calcualations of expenses and opportunity costs.

  What was the cash flow from operating activity

A firm generated income of $911. The depreciation expense was $47 and dividends were paid in the amount of $25. Accounts payable increased by $15, accounts recivables increased by $28, inventory decreased by $14, and net fixed assets decreased by $8...

  What is the portfolio beta

You own a stock portfolio invested 25 percent in Stock Q, 25 percent in Stock R, 20 percent in Stock S, and 30 percent in Stock T. The betas for these four stocks are 1.7, .6, 1.8, and .9, respectively. What is the portfolio beta?

  What is the standard deviation of your portfolio

A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a rate of 8%. What is the standard deviation of..

  What is the cost/volume-profit technique

What is the cost/volume/profit technique? Give examples where your company (Apple INC) could use this analysis. Be sure to explain how you would go about determining the numbers (individual components) for the calculation and any constraints you see ..

  What is the stocks current value-annual dividend

The Felix Corp. will pay an annual dividend of $1.00 next year. The dividend will increase by 12 percent a year for the following two years before growing at 4 percent indefinitely thereafter. If the required rate of return is 10 percent, what is the..

  What if the first payment is due today

You borrow $20,000 with an interest rate of 5% per year to purchase a car. You make 3 equal annual payments for 3 years, with the first payment due at the end of the 1st year. How much is each payment? What if the first payment is due today?

  What should be the stock price in one year

Your analyzing the stock of a certain company. The most recent dividend paid was $4 per share. The company's discount rate is 7%, and the firm is expected to grow at 3% per year forever. What should be the stock price in one year?

  Differences between preferred stock and common stock-bonds

In what ways is preferred stock similar to long-term debt? In what ways is it similar to common stock? Discuss the similarities and differences between preferred stock and common stock & bonds.

  What shall be the required return on microthin stock

We are given the information that Microthin’s stock price was $21 in December 2012, $29 in December 2013, $27 in December 2014, $20 in December 2015, and $26 in December 2016. It also pays annual dividends varying from 2012 through 2016. What shall b..

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