WACC, Corporate Finance

The total book value of WTC’s equity is $40 million and book value per share outstanding is $12. The stock of WTC is currently selling for a price of $35 per share and the beta of WTC is 1.35. The bonds of WTC have a face value of $66 million and sell at a price of 105 percent of face value. The yield to maturity on the bonds is 6 percent and the firm’s tax rate is 35 percent. If the E(Rm) = 11% and Rf = 1%, calculate the WACC of WTC.
Posted Date: 12/4/2012 10:31:17 PM | Location : United States







Related Discussions:- WACC, Assignment Help, Ask Question on WACC, Get Answer, Expert's Help, WACC Discussions

Write discussion on WACC
Your posts are moderated
Related Questions
1- Suppose that on January 1st the annual cost of borrowing in Swiss Francs is 5%. The spot rate of USD on January 1st is CHF/USD0.98. Six month forward rate was quoted as CHF/USD

The case company is a mail order/Internet apparel retailer operating only in the Netherlands. It divides each year into two selling seasons, spring-summer (December-June) and autum

As the company''s sales and earnings increased, so did the demand for capital. The firm''s needs included inventory as well as additional space to house the inventory, computer fac

CAC Co Ltd is engaged in the import and distribution of air conditioners from China. The business has been in existence since year 2000 and the exporter has been trading 50% on do

CivilENG, LTD has a target capital structure of 35% debt and the remainder common equity. CivilENG’s cost of debt on the first $3 million borrowed is 7.5%, but that cost of debt in

Question: (a) A bank quotes the following prices for the US dollar: €0.7915 - €0.7918 A German company receives €10 million as payment for a generator supplied to an Americ

Question: The National Coach Company (NCC), where you work as Marketing Manager, has agreed on a market development strategy. A key objective is to encourage 40% of car drivers

NPV calculation if we have Initial investment 60000,life is 3 year, net working capital is 15000, sale is 75000 per year, variable cost is 1000 per year, fixed cost is 5000 per yea

1. How do you calculate the present value of a Company's bonds? 2. "An analysis of the magnitude and stability of cash flows comparative to fixed charges is very important in de

Question: a) Using illustrative and numerical examples, differentiate between arbitraging and speculation in the context of foreign exchange market. b) One year borrowing