Determine the wacc

Assignment Help Finance Basics
Reference no: EM132157038

Net Income = $ 200,000

Total Debt = $ 600,000

Total Equity = $ 1,000,000

ROE = 20%

Interest Expense = $ 50,000

Corporate Income Tax Rate = 33%

Assuming that Net Income is//will a Perpetuity:

1. Determine the WACC

2. Determine the (Present) Value of the entity

Reference no: EM132157038

Questions Cloud

Show that the energy expression for the particle in a box : compare these to the energy levels the molecule would have if both walls of the box were infinite.
Annual rate of inflation in the price of bread : If the price of a loaf of bread has tripled over the past 5 years, what has been the annual rate of inflation in the price of bread over that time period?
How much money would be in the account : Assume that you deposit $410 into an account that pays 7 percent per annum. How much money would be in the account 8 years from today?
What is the expected future value : Assume that you have a lump sum $140 that you are investing for 3 years at a nominal rate of 24%. What is the expected Future Value?
Determine the wacc : 1. Determine the WACC 2. Determine the (Present) Value of the entity
Key items that caused jbh 2017 cash flow : Identify and briefly discuss three (3) key items that caused JBH's 2017 cash flow per share to differ (either positively or negatively) from its 2017 earnings p
Overpriced underpriced correctly priced : The stock is overpriced underpriced correctly priced at $22?
Determining the required rate of return : What should the market value of the stock be if the required rate of return is 14 percent? (Round answer to 2 decimal places, e.g. 15.20.)
What is fpi optimal capital budget : FPI is at its optimal capital structure, which is 40 percent debt and 60 percent equity, and the firm's marginal tax rate is 40 percent

Reviews

Write a Review

Finance Basics Questions & Answers

  Which bond should the investor select

One is a corporate bond carrying an 8 percent coupon and selling at par. The other is a municipal bond with a 5½ percent coupon, and it, too, sells at par. Assuming all other relevant factors are equal, which bond should the investor select?

  What is the project irr in given cash flow data

Modern Refurbishing Inc. is considering a project that has the following cash flow data. What is the project's IRR? Note that a project's IRR can be less.

  Corporate culture-strategy and leadership

Your local small business association is organizing a workshop centered upon the impact of corporate culture on leadership and corporate strategy.

  Integrated control theory model

Evaluate the integrated control theory model presented by Klein (1989) and its usefulness in contemporary organizations. Explore and discuss the organizational elements that must be established and aligned to support such a model.

  Value of this bond if it paid interest annually

What would be the value of this bond if it paid interest annually? What about semiannually?

  What is expected value of the npv for each of the projects

What is the expected value of the NPV for each of the projects - what is the standard deviation of the NPV for each of the projects?

  Cost of equity and the weighted average cost

Grace Fine Dining Trust is financed 100 percent with equity and intends to remain this way. Grace's common stock beta is 1.20, the expected market return is 12 percent, and the risk-free rate is 5 percent. What are the cost of equity and the weigh..

  What are the free cash flows of the project

Arnold Inc. is considering a proposal to manufacture high-end protein bars used as food supplements by body builders. The project requires use of an existing.

  What is the current price of the common stock

The company's last dividend, D0, was $1.25, its beta is 1.20, the market risk premium is 5.50%, and the risk-free rate is 3.00%. What is the current price of the common stock?

  Why are interest charges not deducted

Why are interest charges not deducted when a project's cash flows for use in a capital budgeting analysis are calculated?

  What is the number of shares that must be issued

What is the number of shares that must be issued to the new investor in order for the investor to earn his target return?

  What are some of the major differences between futures and

what are some of the major differences between futures and forward contracts? how do these contracts differ from spot

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