WACC, Corporate Finance

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 increases to 8.0% for borrowing about the $3 million level. Its tax rate is 30%, its most recent dividend was $1.20 and that dividend has been growing at 2.5% annually and is expected to continue that growth. The current price of CivilENG stock is $18.50 per share. Flotation costs on new equity are 7.5% and CivilENG has retained earnings of $4.5 million. What is the WACC if CivilENG''s total capital expenditure is expected to be $8.5 million?
Posted Date: 3/5/2013 5:20:51 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
Question: i) Compare and contrast the various types of fixed income securities. ii) ‘A new issue of callable bonds will generally carry a higher interest rate

WACC calculation

what is a co op society and its bye laws


GeKay Inc. currently (January 1) has a net income of $10,000,000 which is expected to grow indefinitely(perpetuity) at 10% per annum.   The firm is financed at a debt-to -value ra

how the knowledge of corporate finance helps thea multinational company to take decision about mergers and acquisition

Market-Adjusted and Two-Factor Models - Event Study As mentioned previously, you can use several alternative models to calculate a security's expected return. The market-adjus

Question: (a) With the help of illustrative and numerical examples differentiate fully speculation and arbitraging in the context of foreign exchange. (b) Shirley, a trade

Project is to write paper on financial analysis & business analysis of COTT Corporation. 1st draft, financial analysis as it applies to COTT. 2nd draft Financial analysis & Executi

Suppose you are given the expected yearly returns and standard deviations and correlations shown in the tables below: The market portfolio has an expected return of 18% and