Cost of equity if the corporate tax rate

Assignment Help Financial Accounting
Reference no: EM13793547

A firm has a debt-to-equity ratio of 1.75. If it had no debt, its cost equity would be 9%. Its cost of debt is 7%. What is its cost of equity if the corporate tax rate is 50%?

Reference no: EM13793547

Questions Cloud

Issues related to dna and rna repository : Discuss why humans  did nnot evolve with one central repository of DNA , but rather it is replicated throughtout body?
Summarize the findings for each functional health pattern : In 1,000-1,250 words, summarize the findings for each functional health pattern for the family you have selected. Identify two or more wellness nursing diagnoses based on your family assessment. Wellness and family nursing diagnoses are different tha..
Firm has a debt-equity ratio : Your firm has a debt-equity ratio of .60. Your cost of equity is 11% and your after tax cost of debt is 7%. What will your cost of equity be if the target capital structure becomes a 50/50 mix of debt and equity?
Total preferred dividends dividend to common stock : Barista corporation has been incorporated for 30 years. it's current paid in capital is shown to the right. Batista has been expanding its operations it's board of directors declared a small dividend of 7900 in 2009 and no dividend in 2010. the expan..
Cost of equity if the corporate tax rate : A firm has a debt-to-equity ratio of 1.75. If it had no debt, its cost equity would be 9%. Its cost of debt is 7%. What is its cost of equity if the corporate tax rate is 50%?
Effective interest rate method to amortize bond discount : On January 1, 2016, Parker Company issued bonds with a face value of $80,000, a stated rate of interest of 8%, and a 5-year term to maturity. Interest is payable cash on December 31 of each year. Parker used the effective interest rate method to amor..
What strategies are you using now : What does it take for you personally to be successful academically? What strategies are you using now? What might you try in the future?
Determine the amount of the discount on the day of issue : On January 1, 2016, the Diamond Association issued bonds with a face value of $300,000, a stated rate of interest of 6%, and a 10-year term to maturity Interest is payable in cash on December 31 of each year. Determine the amount of the discount on t..
Create a procurement management plan : How estimates will be obtained from vendors. Operating procedures between the project team and the contracting office

Reviews

Write a Review

Financial Accounting Questions & Answers

  Determine whether the project should be undertaken

The firm is an ongoing profitable business and pays taxes at a 30% rate in the year of income. It uses a 15% discount rate on the new project. Using the NPV approach, determine whether the project should be undertaken (use the relevant tax rate in..

  Which projects should midwest accept

What is its cost of common equity and Which projects should Midwest accept - Cost of common equity and WACC.

  Evaluate the impact on net income

Evaluate the impact on net income

  General fund general journal to record the issuance

During Fiscal year 2014, the City of Hickory Hills issued purchase orders to various vendors in the amounts shown for the following functions of the city: Prepare a summary journal entry in the General Fund general journal to record the issuance of p..

  Evaluate the level of responsibility of the company

Evaluate the level of responsibility of the company in terms of the effectiveness of the response to the security breach. Provide support for your rationale - research the Internet or Strayer databases for information related to business systems th..

  Prepared the bank reconciliation

The accountant for Wade Inc. prepared the bank reconciliation when the December 31 bank statement was received in the mail. The accountant discovered an error when preparing the reconciliation. A check received from Susan Akins, a customer, as paymen..

  Present income division section of the income statement

with the remaining net income divided equally. Net income for the current year was $50,000. Present income division section of the income statement for the current year.

  How much is the payment

The first payment is $300 and each successive payment will increase by a constant dollar amount x. How much is the constant amount x? How much is the 48th payment?

  Check one or more control procedures either general or

check one or more control procedures either general or application controls or both that would guard against the

  Question in summer 2005 timewarner inc announced they were

question in summer 2005 timewarner inc. announced they were setting aside 3 billion to settle lawsuits from

  Cooper consulting limited cooper is an engineering firm

cooper consulting limited cooper is an engineering firm located in calgary alberta. it is a very successful company

  Interpreting financial statements please respond to the

interpreting financial statements please respond to the following1 peachtree complete accounting has the ability to

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