Debt-preferred stock and common stock

Assignment Help Financial Management

Reference no: EM131083004

Alpha Corp. is financed 30% with debt, 10% with preferred stock, and 60% with common stock. Its pretax cost of debt is 6%, its preferred stock pays an annual dividend of 2.50 and is priced at $30. It has an equity beta of 1.1. Assume the risk-free rate is 2%,the market risk premium is 7% and Alpha's tax rate is 40%. What is its after-tax WACC?

Reference no: EM131083004

Questions Cloud

What is the receivables turnover : Evil Pop, Inc., has an average collection period of 50 days. Its average daily investment in receivables is $44,300. Assume 365 days per year. What is the receivables turnover?

When project is an independent project : When a project is an independent project, meaning the decision to invest in a project is independent of any other projects, both the NPV and IRR will always give the same result, either rejecting or accepting a project.

Expectation to be consistent with the capm : You are thinking of buying a stock priced at 100 per share. Assume that the risk free rate is about 4% and the market risk premium is 6%. If you think the stock will rise to $115 per share by the end of the year, at which time will it pay a $1 divide..

Determine the corresponding velocity v'' : Determine the corresponding velocity v' if the spring were linear according to F = 4x where x is in meters and the force F is in kilonewtons.

Debt-preferred stock and common stock : Alpha Corp. is financed 30% with debt, 10% with preferred stock, and 60% with common stock. Its pretax cost of debt is 6%, its preferred stock pays an annual dividend of 2.50 and is priced at $30. It has an equity beta of 1.1. Assume the risk-free ra..

Retirement account and makes his first monthly deposit : Mr. Funperson will graduate with an engineering BS degree from USF before his 25th birthday, and start his first professional job immediately upon his graduation. Mr. Funperson decides to set up a retirement account and makes his first monthly deposi..

Role of business ethics in execution of hr policy : What is the role of business ethics in execution of HR policy

Major types of individual level pay-for-performance plans : 1. Explain each of the three major types of individual level pay-for-performance plans. Your explanations should be comprehensive to receive full credit.

Achieving academic excellence : Directions: Be sure to save an electronic copy of your answer before submitting it to Ashworth College for grading. Unless otherwise stated, answer in complete sentences, and be sure to use correct English, spelling and grammar. Sources must be c..

User Account

All Pages