What is your company weighted average cost of capital
Course:- Financial Management
Reference No.:- EM13942956

Assignment Help >> Financial Management

Your company's target capital structure is 30% debt and 70% equity. The company's after-tax cost of debt is 8%. The company's beta is 1.3, the risk-free rate is 4%, and the market risk premium is 6%. The marginal tax rate is 35%. What is your company's weighted average cost of capital?

Put your comment

Ask Question & Get Answers from Experts
Browse some more (Financial Management) Materials
Cascades Enterprises ordered 4,000 brackets from McKey and Company on December 1, 2014, for a contracted price of $40,000. McKey completed manufacturing the brackets on Januar
Suppose you receive 2,500,000 British Pounds (not Euros) today and plan to convert into US dollars early next February. Which is the correct action to take today in order to h
Compact fluroscent lamps (CFLs) have become popular in recent years, but do they make financial sense? Suppose a typical 60-watt incandescent light bulb costs $.50 and lasts 1
Stanton Corp. began operations on January 1, 2014. The statement of cash flows for the first year reported dividends paid of $166,000. The balance sheet at the end of the firs
Consider the following information for a mutual fund, the market index, and the risk-free rate. You also know that the return correlation between the fund and the market is .9
Pepsico's CFO uses this equation, which was developed by regressing inventories on sales over the past 5 years, to forecast inventory requirements: Inventories = $24.4 + 0.234
You invested $2,000 in the stock market one year ago. Today, the investment is valued at $1,720. What return did you earn? What return would you need to get next year to break
Hawaiian Coconut Milkshakes Inc. is considering the following project. They would like to expand and add a pineapple branch. The firm has paid $95,000 to a consultant in order