Bonds outstanding that are currently selling at par value

Assignment Help Financial Management

Reference no: EM13954833

Jack’s Construction Co. (JCC) has 80,000 bonds outstanding that are currently selling at par (face) value. Bonds with similar characteristics are currently yielding 8.5%. The company also has 4 million shares of common stock outstanding. The stock has a beta of 1.1 and sells for $40 a share. The U.S. Treasury bill is currently yielding 4% and the market risk premium is 8%. What is Jack’s weighted average cost of capital? The corporate tax rate is 35%.

Reference no: EM13954833

Questions Cloud

How much must she pay to retire the mortgage : A borrower took out a 30-year fixed-rate mortgage of $2,250,000 at a 6.2% annual rate with monthly payments. After five years, she wishes to pay off the remaining balance. Interest rates have by then fallen to 4.0%. How much must she pay to retire th..

What is the internal rate of return : What is the internal rate of return of the investment?

Die machines to produce equipment for other firms : Tool Makers, Inc. uses tool and die machines to produce equipment for other firms. The initial cost of one customized tool and die machine is $850,000. This machine costs $10,000 a year (after-tax) to operate. Each machine has a life of 3 years befor..

About these cultures-specifically their economic : Your fast-food franchise has been cleared for business in all 4 countries (United Arab Emirates, Israel, Mexico, and China). You now have to start construction on your restaurants.

Bonds outstanding that are currently selling at par value : Jack’s Construction Co. (JCC) has 80,000 bonds outstanding that are currently selling at par (face) value. Bonds with similar characteristics are currently yielding 8.5%. The company also has 4 million shares of common stock outstanding. The stock ha..

The issuance of the stock dividend the market price : As a result of the issuance of the stock dividend the market price of the stock declined 25%. Googling, Inc

Ultimate recreational tennis racket : You are evaluating a project for The Ultimate recreational tennis racket, guaranteed to correct that wimpy backhand. You estimate the sales price of The Ultimate to be $400 and sales volume to be 1,000 units in year 1, 1,250 units in year 2, and 1,32..

Preparing personal financial statements : Sammy Sosa who is preparing personal financial statements for a bank loan

Great northern fishing company : Great Northern Fishing Company is contemplating the purchase of a new smoker.

User Account

All Pages