+1-415-670-9189
info@expertsmind.com
What is the weighted average cost of debt
Course:- Accounting Basics
Reference No.:- EM131722889




Assignment Help
Assignment Help >> Accounting Basics

QUESTIONS -

1. Most publicly traded corporations are required to submit quarterly (10Q) and annual reports (10K) to the SEC detailing the financial operations of the company over the past quarter or year. respectively. These corporate filings are available on the SEC website. Go to the SEC website, follow the "Search for Company Filings" link, and search for SEC filings made by Tesla Motors (TSLA). Find the most recent JOQ or l0K, and download the form. Look on the balance sheet to find the book value of debt and the book value of equity.

2. To estimate the cost of equity for TSLA, go to finance. yahoo.com and enter the ticker symbol TSLA. Follow the links to answer the following questions: What is the most recent stock price listed for TSLA? What is the market value of equity, or market capitalization? How many shares of stock does TSLA have outstanding? What is the most recent annual dividend? Can you use the dividend discount model in this case? What is the beta for TSLA? Now go back to finance.yahoo.com and follow the "Bonds" link. What is the yield on three-month Treasury bills? Using the historical market risk premium, what is the cost of equity for TSLA using CAPM?

3. You now need to calculate the cost of debt for TSLA. Go to finramarkets.morningstar website enter ISLA as the company, and find the yield to maturity for each of TSLA's bonds. What is the weighted average cost of debt for TSLA using the book value weights and using the market value weights? Does it make a difference in this case if you use book value weights or market value weights?

4. You now have all the necessary information to calculate the weighted average cost of capital for TSLA. Calculate this using book value weights and market value weights, assuming TSLA has a 35 percent marginal tax rate. Which number is more relevant?




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Accounting Basics) Materials
On April 1, 2007 when the machine has a market value of 27,500, it is exchanged for a machine with a fair value of 135,000 and the proper amount of cash is paid. The exchan
Hobart Beverage Company uses the weighted-average method in its process costing system.Materials are included at the start of the production process but conversion costs are
The company's managers expected to produce 20,000 units of product in March. The standard cost for the materials used for 20,000 units is 173,600 yuan, and the standard cost
The rounded present value of an ordinary annuity for nine years at 9% is 6.0. What amount should N report as capitalized lease liability at December 31, 2009?
Select a company that you are familiar with from the transportation industry. Collect the 4 main financial statements from credible sources.
Solar Industries develops and produces high-efficiency solar panels. The company has an outstanding $10,000,000, 30-year, 10% bond issue dated July 1, 2011. The bond issue i
What is callable preferred stock? Why do corporations issue such stock? Given the different features that are associated with stock (callable, cumulative, preferred, etc.),
Peyton Company manufactures Phone X and Phone Y. Peyton can sell all it can make of either. Based on the following data, assuming the number of hours is a constraint, which