User Account

All Pages

Estimate IBMs weighted average cost of capital

Assignment Help Accounting Basics
Reference no: EM132481741

Question - According to finance.yahoo.com, IBM has a beta of 1.6. IBM's market value of debt is approximately $12.08 billion and its total market value of equity is $143.48 billion. IBM's average cost of debt capital (pretax) is approximately 7.5% and its marginal (statutory) income tax rate is 35%. Assume that the risk-free rate is 4.6% and the market risk premium is 5%.

Required - Estimate IBM's weighted average cost of capital.

Reference no: EM132481741

Questions Cloud

What is the amount of depletion that should be recorded : Frederick Mining Company owns a large parcel of land which costs $950,000. What is the amount of depletion that should be recorded
How much would the firm have to sell : How much would the firm have to sell? (Enter your answer in dollars not in millions. Do not round intermediate calculations and round your final answer)
What are two perspectives a business can use in assessing : What are two perspectives a business can use in assessing each segment's attractiveness in terms of its potential for targeting?
Combinations of variables-santano company : The capital budget forecast for the Santano Company is $725,000. The CFO wants to maintain a target capital structure of 45% debt and 55% equity
Estimate IBMs weighted average cost of capital : IBMs market value of debt is approximately $12.08 billion and its total market value of equity is $143.48 billion. Estimate IBM weighted average cost of capital
How can you guarantee validity in your research study : How can you guarantee validity and feasibility in your research study with a mix method? (APA Style, no Abstract needed, 4 paragraphs, Citations and References.
What specific questions would you ask team during debriefing : You have been asked to be a peer reviewer for a team of nurse researchers who are conducting a phenomenological study of the experiences of physical abuse.
Assets and current liabilities are expected to grow : Suppose that Wind Em Corp. currently has the balance sheet shown below, and that sales for the year just ended were $6.5 million.
Determining the variable expenses and fixed expenses : Question: In regards to starting up a small fitness center, what are some of the variable expenses and fixed expenses that might exist for this type of business

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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