Book value of long-term debt at schlumberger

Assignment Help Financial Management
Reference no: EM131980698

For the most recent fiscal year, book value of long-term debt at Schlumberger was $11352 million. The market value of this long-term debt is approximately equal to its book value. Schlumberger’s share price currently is $40.4. The company has 1,000 million shares outstanding. Managers at Schlumberger estimate that the yield to maturity on any new bonds issued by the company will be 10.05%. Schlumberger’s marginal tax rate would be 35%. Schlumberger’s beta is 0.83. Suppose that the expected return on the market portfolio is 8% and the risk-free rate is 2%. Assume that the company will not change its capital structure. Also assume that the business risk of the projects under consideration is about the same as the business risk of Schlumberger as a whole. What would Schlumberger’s after-tax WACC be, given this information? Do not round at intermediate steps in your calculation. Express your answer in percent. Round to two decimal places. Do not type the % symbol.

Reference no: EM131980698

Questions Cloud

Value at risk and expected shortfall on coupon bond : Obtain the monthly 95% Value at Risk and Expected Shortfall on the coupon bond.
What are four types of members of new york stock exchange : What are the four types of members of the New York Stock Exchange, or NYSE? How does NASDAQ differ from the NYSE?
Return on equity under the new capital structure : What would be the expected rate of return on equity under the new capital structure?
What is the cash flow at the end of the forth year : End of Cash Year Flow 1 $325 2 400 3 550 4 ? 5 750 6 800 What is the cash flow at the end of the 4th year?
Book value of long-term debt at schlumberger : For the most recent fiscal year, book value of long-term debt at Schlumberger was $11352 million.
What is the company return on assets : Assume that if Home Depot issues new bonds, the bonds will have 10 years to maturity. What is the company’s return on assets?
Find current share value if dividends are expected to grow : Find the current share value if dividends are expected to grow by $0.10 per year indefinitely.
Deposit in the retirement account : how much Mr. Guardiola should deposit in the retirement account each year for the next 40 years?
Market value of the company to its bondholders-shareholders : What is the market value of the company to its bondholders and shareholders?

Reviews

Write a Review

Financial Management Questions & Answers

  What is the most expensive house you can afford

You want to buy a house and can afford a $15,000 down payment and a $1,000 monthly mortgage payment. If 30-year mortgage loans are available for a nominal rate of 3% per year with monthly compounding, what is the most expensive house you can afford?

  Builtrites marginal tax rate

Builtrite is considering purchasing a new machine that would cost $60,000 and the machine would be depreciated (straight line) down to $0 over its five year life. What the RATFCF’s associated with the purchase of this machine? What is the TCF associa..

  Why it is realistic to use wage replacement ratio

Using calculations, explain to Steven why it is realistic to use a wage replacement ratio of 80%.

  What is the npv of the new video game

M.V.P. Games, Inc., has hired you to perform a feasibility study of a new video game that requires an initial investment of $7.9 million. M.V.P. expects a total annual operating cash flow of $1.39 million for the next 10 years. What is the NPV of the..

  How much must the company set aside each year for purpose

The Great Giant Corp. has a management contract with its newly hired president. How much must the company set aside each year for this purpose?

  Compute the required rate of return

A firm pays a $1.50 dividend at the end of year one (D1), has a stock price of $80 (P0), Compute the required rate of return (Ke).

  Commonly used as measures of division management performance

Return on Invested Capital (ROIC) and Economic Value Added (EVA) are commonly used as measures of division management performance. Are these measures equally useful for, say, a consumer goods company and a natural resources company (oil is the most v..

  Two months after the burglary of his personal residence

Two months after the burglary of his personal residence, Erick is audited by the IRS.

  Depreciate this cost straight-line to zero over project life

Romo Enterprises needs someone to supply it with 122,000 cartons of machine screws per year to support its manufacturing needs over the next five years, and you’ve decided to bid on the contract. It will cost you $890,000 to install the equipment nec..

  What is price and earnings ratio

A company has an EPS of $1.80, a book value per share of $17.46, What is its Price/Earnings Ratio

  Asset valuation and risk personal finance problem

what is the most Laura should pay for the asset if it is classified as? low-risk,? average-risk, and? high-risk.

  To estimate the current value or selling price of bond

To estimate the current value or selling price of a bond,

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd