Determine the weighted average cost of capital, Finance Basics

1. The current interest rate is 6.83%. CanGo.com's stock has a beta of 2.0. Estimate the cost of equity.

2. CanGo.com has a bond with a semiannual coupon rate of 9% and 5 year maturity. Currently it is traded at $961.39. Determine the cost of debt.

3. The preferred stock of CanGo.com o§ers $1.21 annual dividend and currently is traded at $11 per share. Determine the cost of preferred stock for CanGo.com.

4. CanGo.com has the targeted capital structure of 30% debt, 60% equity, and 10% preferred stock. CanGo.comís tax rate is 30%. What is the WACC for CanGo.com's core business.

Posted Date: 2/21/2013 7:16:38 AM | Location : United States







Related Discussions:- Determine the weighted average cost of capital, Assignment Help, Ask Question on Determine the weighted average cost of capital, Get Answer, Expert's Help, Determine the weighted average cost of capital Discussions

Write discussion on Determine the weighted average cost of capital
Your posts are moderated
Related Questions
Explain the method of Offer of Sale Method of offer of sale consists in outright sale of securities through intermediary of issue houses or share brokers. In other words, sh

Three of these companies have bonds that carry investment - grade ratings. The other 3 companies carry junk - bond ratings. Judging by the information in the table, which 3 compani


International Data Systems information on revenue and costs is only relevant up to a sales volume of 100,000 units. After 100,000 units, the market becomes saturated and the price

Before purchasing insurance we have to go through different factors. Among different important factors there are two most crucial aspects we should consider before buying insurance


A. Michael Spence An American economist who was awarded by the Nobel Memorial Prize in Economic Sciences. Spence is a lecturer of management at Stanford University in the Gradu

Assume a levered firm has a current value of $650,000,000. The firm currently has $259,258,527.20 in debt. Without debt, firm value (i.e. VU) would be $580,000,000. Ignore the cost

Example of Asset Based Valuation Extracted information from the books of Kent Limited.   Current liabilities Bank overdraft    Sh. 300,000

Example of EOQ Assumptions ABC Ltd requires 2,000 units of a component in its manufacturing method in the coming year that costs of Sh.50 each. The items are obtainable locall