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 1: Collect a current annual report (2009) of an Australia listed company. Select the firm that reported the following assets. Select BOTHtypes of assets. Proper

David Abbot is interested in purchasing a bond issued by Sony. He has obtained the following information on the security: Par value $1000, coupon interest rate 6.0%, corporate tax

Hello, can you help me to calculate the Discount rate and Internal Rate of Return?

A tax rate of 20% has been introduced in the Frog Islands Republic. The value of Sun corporation is now 100.000€. Bright Star Co. debt has no changed. The required rate of return t

Critically appraise how companies set their dividend policies, and explain the factors that a company will consider in setting its dividend policy and in determining the level of d

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

Question 1: Capital Expenditure Decisions and Investment Criteria (30 MARKS) In recent years Morten Ltd, a company that manufactures and markets a range of p

This method simply calculates the average of a number of expert estimates. Let E denote the number of experts, and mn,e denote the forecast of expert e, e =1, ... ,E, for SKU n 2N.

Question 1: Compare and contrast the Capital Asset Pricing Model with that of the Arbitrage Pricing Theory. Question 2: (a) Explain the concept of stock market efficien

You are a ceo of a sotware firm that has limited access to debt equity markets. The average return on last year projects is 28 % . and cost of capital is 12%. would npv pr Irr be